www.monash.edu

The Future of Tourism : Implications for Estonia

Dr Jeff Jarvis

Director: Graduate

Tourism Program (Visiting researcher EBS)

Estonia Resort Hotel &

Spa, Parnu

September 18, 2015

www.monash.edu

2

www.monash.edu

3

Visitor Economy (Beyond Leisure)

www.monash.edu

4

AUSTRALIA (Types of Tourists)

www.monash.edu

5

“Work in Estonia” Campaign (2015) http://www.workinestonia.com

www.monash.edu

6

Work as Tourism (Career Break) Short term professional placements

www.monash.edu

7

10 Key Strategic Planning Issues in International

Tourism Management (Jarvis, 2013)

• (1) Market diversification

– Try not to rely on one or two core markets

• (2) Promotion and marketing of the destination

– Development of /Role of NTO and role of research

– Brand development and investment

• (3) Dispersion from gateway cities

– Spreading the economic benefit to regional areas

– Role of product development in regions (clustering)

• (4) Seasonality management

– Improves return on investment for investors

www.monash.edu

8

10 Key Strategic Planning Issues in Tourism

Management (Road map for all destinations)

• (5) Targeting of High yield segments (Yield vs Numbers)

– Research focused (Business Events, Backpackers, Students)

– Niche market development (Special interest tourism)

• (6) Facilitating industry investment (Infrastructure)

– Provide conditions that stimulate $$ investment or Government funded

• (7) Stimulation of Product Development and Quality improvement

– Encourage new product, generates media and repeat visitation (Brand Advocacy)

• (8) Education/Training provision

– Provide human capital to manage the growth

• (9) Stimulate increased access to the destination

– Airport funding – Negotiations with airlines (Airline-Ferry partnership?)

• (10) Development of an Events strategy

– Provides a reason to come to the destination

– Can counter seasonality, increase spend & dispersion, Media coverage

www.monash.edu

9

Estonian Tourism: Seasonality Challenges

www.monash.edu

10

Strategic priorities ‘wish list’ for Estonia

1. Address seasonality

> Business events, Events, Target markets

2. Increase Dispersion

> Increase awareness, Target Markets

> Strategic regional destination and urban village

management

3. Increase length of stay

> Product development, Urban villages

4. Increase ‘in country’ expenditure

5. Target emerging markets, Segments

www.monash.edu

11

Key Global Trends

• 1. Sustainable Growth

• 2. New Tourism Economy

• 3. Rise of Asia (BRIC)

• 4. Cruise Tourism

• 5. Strategic Event Tourism

• 6. International Education as Tourism

• 7. Technology & Sharing Economy

• 8. Segments to Watch

> Food, Health, Youth

www.monash.edu

12

Key Global Trends

• (1) The sustainable growth

industry?

– Responsible travel –

sustainable tourism -uneven

growth – wealth distribution

– Consumers and CSR

– Emerging economies vs

Advanced economies

– Managing the growth

opportunities (Skills?)

– Capacity issues in Tallinn?

www.monash.edu

13

www.monash.edu

14

www.monash.edu

15

www.monash.edu

16

(2) The New Tourism Economy

• New Tourism vs Old Tourism

• Independent Travel:

– A form of travel where the participants

maintain the maximum amount of control

over the elements of their trip

– * Where they go

– * How they get there

– * When they go

– * What they do

www.monash.edu

17

(2) The New Tourism Economy

– Understanding “New Tourism”

– Driving forces

> Old tourism business model

> Internet – Control of knowledge – Social media

> Transport business models – Budget airlines

> Airline efficiency (A350) opening new destinations

– ‘New Urban Tourist - Like a local’ movement

– Implications and opportunities for destinations

> Role for city/regional tourism boards

> Yield and linkages into SMEs

www.monash.edu

18

Independent travellers and “micro packaging”

www.monash.edu

19

www.monash.edu

20

www.monash.edu

21

Visa’s ‘Not A Tourist’ campaign 2015

• “The Visa #notatourist message speaks strongly to this audience, encouraging young Chinese travellers to get off the beaten path and experience Australia as locals, not just as tourists.”

• Chris Clark, Group Executive for Asia Pacific at Visa Inc. (Sept 2015)

www.monash.edu

22

www.monash.edu

23

Tourists vs Locals (London) Red = Tourists Blue = Locals (Fischer 2012)

(Geo-tagged photos from Flickr and Picasa)

www.monash.edu

24

Tourists vs Locals (Sydney) Red = Tourists Blue = Locals (Fischer 2012)

(Geo-tagged photos from Flickr and Picasa)

www.monash.edu

25

Tourists vs Locals (Tallinn) Red = Tourists Blue = Locals (Fischer 2012)

(Geotagged photos from Flickr and Picasa)

www.monash.edu

26

www.monash.edu

27

New Urban Tourists (Implications)

• Opportunity for SME’s outside the existing

tourism regions to generate additional tourism

revenue.

• Development of new tourism ‘urban villages’

– Kalamaja, Kadriorg

• Opportunity for tourists to spend more and

stay longer. (Clustering)

• Challenge: avoid ‘anti tourist conflict’ in

destinations

– Barcelona, Berlin, Hong Kong

www.monash.edu

28

Anti tourism movements Stallwood, O, The Guardian UK, 4/12/2012

www.monash.edu

29

New Tourism Marketing

• Social media vs traditional media

> Digital natives vs Digital divide

• The rise of mobile internet, Smart phones

• Travel journalists and content sharing by brand

advocates

• Two way communications

> Company and consumers

• Opportunity for high impact low budget marketing -

Database marketing, Social media marketing

• Technology companies vs Tourism Companies

– “Bookings.com want your clients”

www.monash.edu

30

Tourism Clustering for Independent Travellers

• In the ‘new tourism’ economy where consumers

have greater control, destinations have to

appear ‘thick’ in product to attract visitation,

repeat visitation and yield.

> Re-thinking urban tourism

> Cities working with the ‘day trip’ hinterland

• Eg: ‘Tallinn Plus’ (1.5 – 2 hour travel time)

> Haapsalu, Lahemaa, Rakvere, Tallinn’s Islands

– Castles, Nature, Island life/wilderness (Prangli)

– Objective: Every tourist who comes to old town leaves

wanting to return to explore more

www.monash.edu

31

www.monash.edu

32

(3) The Rise of Asia (And B.R.I.C tourism)

www.monash.edu

33

(3) The rise of Asia (And BRIC tourism)

– Product shift (Urban vs sun)

– Asian ready product

– Helsinki Airport is a strategic

advantage for Estonia

– Chinese and Japanese

nights in Estonia

– Emergence of Asian ‘independent

travellers’

– Role of women in the travel

decision

– Research (Asian visitors in Tallinn)

– Positioning of “Romantic Tallinn”

www.monash.edu

34

(4) Cruise Tourism: the new mass tourism

www.monash.edu

35

(4) Cruise Tourism: the new mass tourism

– Boom segment of global tourism

> 2010 – 18.4 mn - 2015 – 22.4 mn (Cruise Market watch 2015)

– Asian cruising (Positioning of new ships)

– Managing cruise tourists strategically?

> Increase spend per day

> Can become ‘brand advocates’

– Look at a ‘cruise day’ as a special event.

– Help facilitate options where to spend their money

(dispersion)

- Link to public transport, dispersal to urban villages

www.monash.edu

36

Launched 2014, Based in Shanghai

www.monash.edu

37

Cruise ship – city interface (Tallinn 2015)

www.monash.edu

38

(5) Strategic Event Tourism

– Event management and tourism

> Seasonality

> Role as a trigger

– Event audit and management

> Macro timing, industry partnerships

– Business Events

> Substantial industry benefits, high yield

– Tallinn Music Week case

> Fund and grow strategic events (out of season)

www.monash.edu

39

www.monash.edu

40

(5) Business Event Tourism

www.monash.edu

41

(6) International Education as Tourism

– Growth forecasts (UNESCO) – 3.4 million in 2009 to seven million international students by 2020.

– Full degree (2887: 2014)

– Study Abroad/Exchange Students (1274) (2012-13)

– Generate VFR, Brand ambassadors, Long stay,

improve seasonality, high spend per visitor, repeat

visitation

– Research Study 2011 (Jarvis, Upcoming Journal of Baltic Studies)

» Estimated spend 3390 euros per student (Exchange students)

» 75% had or were expecting VFR visitation while in Estonia

» 70% would reccomend friends visit Estonia as tourists

www.monash.edu

42

(7) Technology & The Sharing Economy (New Business Models)

– Eg: airbnb, Bla Bla Car

– Cost advantages, Local experiernce

– $10 billion invested in venture capital in 2014 (Sharing economy

products)

– Expand available capacity of cities to host tourists

– Development of new urban locations

– Small investors can access the international market

– Issues of oversupply? Who provides hospitality?

– Challenges

> Tax, Workers Rights, Regulations/Safety, Zoning

– Impact on Hotels and Hostels business models

– airbnb ‘Business’ and the corporate travel market

• Technology companies and tourism (eg: Bookings.com)

www.monash.edu

43

www.monash.edu

44

www.monash.edu

45

www.monash.edu

46

(8) Segments to watch

Food Tourism (Restaurant

Australia)

» Clean, green, organic

Estonia

Wellness & Health Tourism

» (Meditation, Yoga, Cycle

Tourism )

Youth Tourism (18 – 35)

» Career break – gap year

tourism

www.monash.edu

47

Restaurant Australia

Since December 2013, fuelled by the ‘Restaurant

Australia’ campaign, Australia has seen spend

growth of 12.6% on food and wine – an increase

of $531 million – which means one in five dollars

spent in Australia is on food and wine.

(Tourism Australia 2/9/15)

https://www.youtube.com/watch?v=Ta_3CsviIsc

– https://www.youtube.com/watch?v=yV0p-2sSa58

www.monash.edu

48

www.monash.edu

49

Conclusion: The Future of Tourism and Estonia

• (1) Potential access to emerging BRIC markets

> Helsinki Airport (Asia)

> Proven success with Russian inbound

• (2) Clean, Green, Wilderness product

> Ease of access to wilderness from the gateway city

> Vs Global Urbanization

• (3) Unique culture, ‘undiscovered’

• (4) Proximity to a large customer base within 3

hours flying time

www.monash.edu

50

Contemporary Strategic Tourism Management

• Dynamic, rapidly growing environment

– New ‘game plans’ are required by destinations

• Visitor Economy - Global Mobility vs Tourism

• Yield vs Numbers – Strategic Management

• The rise and rise of “Independent Travellers”

• Role of the Industry & Government

• Destination Development Strategy

• Research led marketing and management.