T RANSPORT

Transport is the most critical element in the promotion of the growth of domestic and international tourism. At a simple level,

142 CHAPTER FOUR The supply of tourism

transport links the tourist from the origin area with the destina- tion area. It enables the tourist (the holidaymaker, business travel- ler and other categories of traveller) to consume the products and experiences they have purchased, because it links the supply chain together. Figure 4.3 illustrates the all-embracing role of transport to:

● facilitate the tourist trip to the destination

● enable tourist travel within the destination.

In addition, transport may be an attraction in its own right (e.g.

a cruise ship or a trip on the Orient Express). Tourists who ‘tour ’ by road may use public transport or private transport (e.g. the car) to experience a variety of destinations. Increasingly, the transport sec- tor is entering into strategic alliances (i.e. formal business partner- ships) where different operators will seek to offer seamless transport experience for travellers, recognizing the selling opportunity. For example, if the tour operator can sell not only a holiday but also airport transfers, car hire and tours from approved partners with whom they have entered into a strategic alliance, then their profit- ability is increased. This can be achieved through commissions from selling partners ’ products and is evident in much of the web-based marketing by low-cost airlines as well as through airlines cooper- ating rather than competing. Figure 4.4 summarizes the complex range of issues which airlines face when deciding whether to enter into strategic alliances or other forms of collaboration. It shows that

Tourist leaves home area

Scenic train journey

Local tours

by coach Car hire Local cruise Cycle hire Hotel

Departure airport

Airport shuttle/taxi/public transport/private car

Flight to destination

Airport shuttle to hotel Transport link

Destination airport

FIGURE 4.3 The role of transport in tourist travel

Transport 143

environmental drivers of the key factors affecting the likely outcome

External drivers

• Economic turbulence

•Cost savings

•Globalization of competition and technology

•Technological change

•Rapid product/market changes

•Risk sharing

•Economies of scale, scope and learning

•Access to assets, resources and competences

•Shaping competition

•Marketing – Code-sharing – Frequent flyer reciprocity – Promotion integrated – Promotion separate

•Product/service – Integrated brands – Brands remain separate – Adopted under licence

•Computer systems – Integrated – Shared – Separate

•Equipment and equipment servicing – Shared equipment – Separate equipment – Shared maintenance – Separate maintenance

•Logistics – Shared offices – Separate offices – Shared terminals – Separate terminals

Strategic alliance structure Organic development

•‘Go it alone’

•Capability

•Compatibility

•Commitment

•Control

•Geographical fit Choice of alliance partners

Strategic alliance

•Without equity participation

•Strategic alliances

•Franchising

•Joint ventures

•Code sharing

•Marketing agreements

•Licensing agreements Joint development

•Merge with other airline(s)

•Acquire other airline(s)

•Be taken over by other airline(s)

Mergers and acquisitions

Strategic alliance

•With equity participation

•Alliance must add value for partners

•Partners must be able to learn

•Partners must be able to protect own competencies

•Partners must be able to retain flexibility Management success factors

Feedback

Evaluation of the performance of alliances in terms of improving organizational performance and organizational learning Internal drivers

FIGURE 4.4 Conceptualization of the collaborative strategy process for international airlines (reprinted fromStrategic Management for Travel and Tourism , N. Evans, D. Campbell and

G. Stonehouse, 253, © 2003 with permission from Elsevier)

144 CHAPTER FOUR The supply of tourism

the airline has to examine its own motivation for entering into an alliance (strategic analysis) followed by the different options avail- able for an alliance (i.e. joint development or merger/acquisition).

This then leads to a review of possible collaboration partners. Then the alliance is reviewed against a range of operational issues associ- ated with the alliance structure. This illustrates the increasing inte- gration within the tourism sector, with different business interests linking together in the supply chain: a feature that will be discussed later in the chapter. The tourism industry and its growing complex- ity has seen the growth of organizations and agencies which have been developed to manage the supply of tourism.

T

^OURISM

O

RGANIZATIONS AND

A

GENCIES AND THE

S

^UPPLY

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^OURISM

Within the tourism industry, a number of ‘institutional elements ’ have sought to manage the growing complexity of tourism supply in relation to services and business operations. At one level, the public sector has sought to plan and manage supply issues within countries and destinations to establish an orderly and logical direc- tion for the tourism sector. This is often described as a strategic direction, expressed as a ‘tourism strategy ’, with the different business interests working towards the wider development of the tourism sector. In the UK these are a number of national tourist boards, supplemented by regional or area-based tourist boards and the work of local councils in the public sector. These boards not only promote the region for which they are responsible but attempt to foster the continued economic development of tourism as well as encouraging members of the tourism sector to work together to enhance the quality of provision (see Chapter 11 for more detail).

This has led to a growing number of partnerships between tour- ism industry partners (stakeholders), the local industry and the destination area. For example, in Western Australia the growth in wine-based tourism has led to the formation of public and private sector partnerships, whereby tourism industry associations have been created. Similarly, in Scotland’s first National Park simi- lar bodies have emerged to promote specific destinations or indi- vidual products (i.e. adventure tourism). These partnerships not only market the local products but also, through collaboration and

partnership working, seek to raise the profile and number of vis- itors to the area by building on synergies between the businesses to increase visitor spending. These lobby groups receive a grant from the public sector and raise additional finance from membership subscriptions. Trade associations also operate at a national level, such as specialist industry sector groups (e.g. the Association of Scottish Visitor Attractions based in Stirling, Scotland). There are also much higher-profile industry lobby groups such as the former Association of British Travel Agents (ABTA), now renamed ABTA- The Travel Association, which represents travel agents and tour operators and is a corporate trade association.