Reports

UK package holiday industry Chris Ryan describes briefly some of the findings from a Delphi study of trends in the British Package Holiday industry for the period 1990-2000. The sample was drawn primarily from travel agents and tour operators, and a notable finding was their apparent lack of concern over environmentalproblems that the industry might face.

That the package holiday industry in the UK cannot continue as it has in the recent past has become a common- place statement. A history of failing companies, takeovers, price wars, and chaos in European air traffic control has become well documented.’ However, the problem is what form will the industry take in the next de- cade, and what will be the areas of growth? One method of attempting to define the future is the use of Delphi forecasting techniques. The applica- tion of Delphi techniques to tourism is becoming better known, although it is far from common. Certainly there appears to be more literature relating to econometric modelling than to the qualitative methods of Delphi.* However, Yong, Keng and Leng used Delphi methods in 1989 for forecast- ing future scenarios for the Singapore tourism industry.3 In 1980 Seely, Iglash and Edge11 reported one method of using Delphi techniques to forecast international tourism condi- tions by making use of delegates at tourism conferences.4 D’Amore and

‘Associates (1976) undertook a fore- cast for Tourism Canada for the period 1976-86.:

The technique has not been com- mon in ‘tourism because of a series of problems arising from the technique. These are well documented and in- clude the problem of the number of respondents diminishing over time - a problem that arose in this study. Further problems relate to the level of expertise required, and the selection of ‘experts’, and opinions vary as to level of expertise required.6 Some argue that high levels of expertise are essential, while others disagree. Another related issue is the number of respondents required for the conclu- sions to possess any form of validity. Dalkey argues that 15-20 members is the minimum required but Martin0 argues that higher numbers are

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necessary.’ Having made decisions relating to

these problems, the normal procedure is that a series of rounds occur during which respondents are asked to indi- cate the likelihood of events occuring, the year of probable occurrence, and the importance of events. Each round will contain a report of the previous findings, and the notion is that a con- sensus will emerge which represents the ‘forecast’. A minimum of three rounds usually takes place.

Background

This study began in 1988, and took place over three rounds in 1988-89. Originally over 100 named individuals in the UK travel agency and tour operator industry were approached and in addition others were solicited from airports intensively used by char- ter flights, and two academics who were known to have a specialized in- terest in package holidays. The indi- viduals concerned were either known to the author or, in most cases, had written letters to the trade press. This last criterion was used because it iden- tified them as people who were both knowledgeable and interested in the industry. In addition, another crite- rion for selection was that all respon- dents should hold at least intermediate management posts. Of the total of 120,28 ‘stayed the course’ - more than the number recommended by Dalkey in 1969.’ Of these 28, two were academics, two were from airports and the rest were equally divided be- tween tour operators and travel agents. All stated their personal opin- ions and were not representing their organizations.

Discussion

For the period 1990-2000 the respon- dents forecast an overall growth rate

of 22.7% in the demand for package holidays by UK citizens. A number of locations were separately identified, and three broad groups of destinations emerged. For example, Australia, California and Florida emerged as above average growth rate destina- tions, while Spain, Italy and Greece belonged to the below average group of countries. New England and Goa were among those that recorded ‘aver- age’ growth.

This pattern of destinations was confirmed by responses to questions relating to the potential growth of types of holidays. Partly reflecting de- mographic trends, the ‘teens and 20s’ market is expected to grow at about 10% for the years 199&2000. An average growth rate of about 20% is expected for winter and summer sun products, and the highest growth rates of about 30% are expected for seat- only sales, wintersports, long haul and the over-55 markets. Of particular in- terest is the result that hobby-based and special interest holidays were ex- pected to grow at about lo%, which is perhaps contrary to the expectations that arise from changes in the 1eisure:work ratios that accompany an emergent post-industrialized society.’ With reference to these growth rates many respondents added caveats, not- ing a need to increase the quality of the package holiday product, that companies should be seen to ‘care’ about their clients, that there was a need to respond with more specialized packages and that companies had to meet changing consumer needs.

With reference to the structure of the industry there was a strong con- sensus that concentration ratios would not noticeably increase in the next decade. An interesting finding is that, as the major tour operators can set up subsidiary companies to offer a com- bination of specialist products allied with economies of scale in administra- tion and transport, there is nothing inherent in a situation where the mar- ket may be shifting to niche market- ing, smaller specialist companies and greater customer awareness to inhibit growing concentration ratios. How- ever, respondents identified three main constraints on further increases in concentration:

TOURISM MANAGEMENT March 1991

Reports

sounding of current opinion about fu- ture trends which reveals the premises upon which decision-makers in the industry are operating

0 if competition is based on quality of product rather than price, small tour operators can compete;

0 anti-monopoly legislation may act as a deterrent;

l the large tour operators may be unable to think small and flexible in a way that maintains quality for clients.

A number of questions related to the future of the Association of British Travel Agents (ABTA). Of the re- spondents 56% considered that ‘Stabi- liser’, the means by which the Associa- tion enforces conditions of trading for its members, would become unen- forceable by 1995 due to EC legisla- tion after 1 January 1993, and 70% thought this would be likely by the year 2000. Equally, by the year 2000 one-fifth of the sample thought it ‘very possible’ that ABTA would be a ‘powerless’ trade association, with a further 40% thinking this situation to be ‘possible’.

Another impact of the emergence of the post-1993 Europe was the greater competition that would occur between UK and European tour operators. Of the respondents 95% thought that by the year 2000 UK tour operators would be selling their products in Europe through European travel agents, while two-thirds of the sample believed that UK tour operators would engage in direct selling in Europe. However, much of this de- velopment was thought to occur after 1995. Equally, it was envisaged that European tour operators would seek to sell to the UK market, and there was some consensus that the Euro- peans’ use of ‘modular packages’ might help them to respond to UK conditions. However, an alternative viewpoint that emerged was that UK tour operators could easily respond to this challenge, and that the variety of holidays offered in brochures was in fact already a series of ‘modulars’ in that the holiday-maker was in effect selecting from a number of options as to airport of embarkation, choice of hotel at the resort, and resorts served by destination airport.

The author was surprised by the low rating of importance given by the re- spondents to environmental issues.

Quite simply, respondents did not see this as an issue. As one respondent wrote, ‘The environmental issues will probably be low on the list of factors affecting choice’. Within the question- naires to which respondents replied various scenarios were stated, such as the viewpoint that increased fears about skin cancer and other environ- mental issues might mean that the traditional package-holiday-in-the-sun concept will be replaced by holidays such as those offered by CenterParcs. Responses included statements such as ‘definitely no . . . ‘, ‘ . . . it sounds even worse than the package holiday

. . ’ and (possibly) the more consi- dered,’ . . . CenterParcs style holidays will be additional to the main holidays . . .‘. No respondent thought to con- cur with the scenario that environmen- tal concerns would mean significant changes in styles of holidays being issued.

Conclusions

Shimizu argues that the Delphi method of forecasting had in fact poor predic- tive power in forecasting quantitative change when comparing the forecasts of the 1976 and 1978 studies on Cana- da undertaken by D’Amore with the eventual outcome. lo Shimizu com- ments that this may in part be because the process tends to deal with events as independent of each other, rather than exploring the interrelationships between them. This study sought to overcome this by a process of linking questions, and certainly in cross- checking forecast rates of growth be- tween different locations and types of holiday a consistency as to overall growth rates emerged. However, Shi- mizu maintains that more attention should be paid to the qualitative com- ponents of the forecast and

the Delphi technique is more useful as a means of brainstorming in situations where there is uncertainty about the future. The accuracy of the individual forecasts are debatable. The level of interest and debate which a study and its results initiate are the key to the Delphi technique.”

In this respect the results of this study may be pertinent not in terms of the actual quantitative forecasts but as a

Chris Ryan

University of Saskatchewan/ Nottingham Business School

Burton Street

Nottingham NG14BU, UK

Notes ‘J. Davison and E. Welsh, ‘Chaos in the air - nightmare on the ground’, Sunday Times, 30 July 1989, pp Al4-15; T. McGirk and R. Whitaker, ‘Chaos looms as air-traffic controllers quit work’, Indepen- dent, 13 July 1988, p 1; and C. Ryan, ‘Trends past and present in the package holiday industry’, Service Industries Jour- nal, Vbl 9. No i, 1989, pp 61-78. “SF. Witt. ‘An abstract mode-abstract node model of foreign holiday demand’, Applied Economics, Vol 12, 1980, p 16; and R. Summary, ‘An estimation of tourism demand by multivariate regression analy- sis - evidence from Kenya’, Tourism Man- agemenf, Vol8, No 4, 1987, pp 301-312. 3Yeong Wee Yong, Kan Ah Keng and Tan Leng Lang, ‘A Delphi forecast for the Sing- apore tourism industry - future scenario and marketing implications’, international Marketing Review, Vol 6, No 3, 1989, pp 35-46. “R.L. Seely, H.J. lglash and D. Edgell, ‘Utilising the Delphi technique at interna- tional conferences - a method for forecast- ing international tourism conditions’, Travel Research Journal, Vol 1, No 1, 1980, pp 30-36. 5D’Amore and Associates, ‘Tourism in Canada’, Report for Tourism Canada, 1976. 6G. Welty, ‘Problems of selecting experts for Delphi Exercises’, Academy of Man- agement Journal, Vol 15, 1974, pp 121- 124; J.P. Martin0 Technological Forecast- ing for Decision Making, American Else- vier, New York, 1983; and H. Sachman, Delphi Critique: Expert Opinion Forecast- ing and Group Process, DC Heath, Lexing- ton MA, USA, 1975. 7N.C. Dalkey, Delphi Method: An Ex- perimental Study of Group Opinion, The Rand Corporation, 1969; and Martino, ibid. ‘Dalkey, ibid. ‘J. Zuzanek and R. Mannel, ‘Work leisure relationships from a sociological and social psychological perspective’, Leisure Stu- dies, Vol 2, September 1983, pp 327-334; and F. Emery ‘Alternative futures in tour- ism’, International Journal of Tourism Man- agement, March 1981, pp 49-67. “J.K. Shimizu, Tourism Forecasting and the Delphi Technique: a case study, un- published MA thesis, University of Water- loo, 1988. “J.K. Shimizu, ibid, p 141.

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