Introduction

World maps define national boundaries, but those lines belay the increasingly clear nature
of the global economy. As recently as 30 years ago the international enterprise was a
relatively rare phenomenon, and the term multinational was seldom heard (Gomes, 1991).
Today, many companies have transcended the multinational phase and operate as trans-
national or global companies. These labels reflect a major shift in the structure of the world
market for goods and services - a shift to a competitive framework that has far-reaching
impacts for almost all industries. Experts have predicted that by the year 2015, global
corporations will control approximately half of the worlds assets. ompanies are in the
process of internationalizing the production of a vast array of manufactured goods, with
mega-companies controlling factories all over the world.

Globalization has become an umbrella word for a number of political, sociological,

environmental and economic trends which present challenges on a worldwide scale. The
world as it was known long time ago, does not exist any longer, now we experience shrunk"
world (Dr. M.Cho, 2005). The globalization of business and lifestyles is characterized by
communicating over vast distances in foreign languages, frequent travel to overseas
countries, dealing in many currencies, and coping with a variety of political and social
systems, regulatory environments, cultures and customs. While these aspects of globalization
are easy to identify, understanding the underlying current and future trends can be
problematic. Analysis, however, reveals that a number of issues are reshaping the global
hospitality industry, although there are clearly some complex questions that are still to be
resolved:

International expansion with common product and brand position;

Sales and marketing programs that fully capture global economies of scale;

Organizational structures that allow global delivery of services with local operational
control;

Cross-border employee training to support operations (Cline R.S. n.d.).

Globalization is typified by the rapid movement of people, information and capital across
national borders worldwide in ways that would have been difficult to envision not too many
years ago. Yet 'globalization,' accepted though it is as a fashionable force, is a big concept
requiring careful definition. As many experts you as many definitions you will get, therefore
in this paper I will challenge to point out different definition of globalization and what is
behind it. This paper will outline such issues as globalization vs. Internationalization and its
difference. Globalization has huge influence on Hospitality Industry, and it brought lots of
challenges, consequently Hospitality Industry should and does keep up with rigid business by
defining strategies and tends toward Globalization.

1. Globalization and its definition

In order to understand globalization, after defining it, we should have a look at how it got
started. During the 1970s the word globalization was never mentioned in the pages of
the New York Times. In the 1980s the word cropped up less than once a week, in the first half
of the 1990s less than twice a week - and in the latter half of the decade no more than three
times a week. In 2000 there were 514 stories in the paper that made reference to
globalization; there were 364 stories in 2001 and 393 references in 2002.

Based on stories in the New York Times , the idea of being anti-globalization" was not one
that existed before about 1999. Turning from the newspaper to the internet, globalization
brings up 1.6m links through the use of the Google search engine, and typing in anti-
globalization" brings up 80,000 links.

Type in globalization and inequality and there are almost 500,000 references, 700,000
references to globalization and environment, almost 200,000 links to globalization and labour
standards, 50,000 references to globalization and multinationals, and 70,000 references to
globalization and cultural diversity and search of globalization and the IMF yields 180,000
suggestions.

The search for better and cheaper ways of doing business always seems to be an
unstoppable force that drives multinationals to locales that offer the greatest incentives" -
subsidies, low taxes, low wages, and easy access to markets" (S. Fischer, 2003).

These locales almost never include the home country whose very success has made it
unattractive due to high wages and societal protectors such as labour unions which struggle
for working rights and employment law.

With such vast variety of product, companies need to keep customers loyalty, thus forced
to go internationally. People nowadays aggressively travel, therefore expecting to find known
product or service worldwide. Business world works in a jungle way - either
you have dinner or you are dinner.

What is Globalization?
 There are nearly as many definitions of globalization as authors who write on the subject.
One review, by Scholte, provides a classification of at least five broad sets of definitions:

Globalization, as internationalization. The global" in globalization is viewed as simply

another adjective to describe cross-border relations between countries. It describes the
growth in international exchange and interdependence.

Globalization, as liberalization. Removing government-imposed restrictions on

movements between countries.

Globalization as universalization. Process of spreading ideas and experiences to people at

all corners of the earth so that aspirations and experiences around the world become
harmonized.

Globalization as westernization or modernization. The social structures of modernity

(capitalism, industrialism, etc.) are spread the world over, destroying cultures and local self-
determination in the process.

Globalization as deterritorialization. Process of the reconfiguration of geography, so that

social space is no longer wholly mapped in terms of territorial places, territorial distances and
territorial borders. (Najam, A., Runnalls, D., Halle, M., 2007)

Values can play a role in defining globalization. A definition of globalization as

"Americanization" or, perhaps, the "McDonaldization," of the world presents globalization as
a process driven by American consumer culture that rolls over other cultures. On the other
hand, another definition of globalization highlights its cross-cultural impact, taking into
account the nature of globalization as a way cultures interact and learn from each other.
Globalization is the acceleration and intensification of interaction and integration among the
people, companies, and governments of different nations (Rothenberg, L.E., 2002-2003).

The term globalization is widely used to describe the increasing internationalization of

financial markets and of markets for goods and services. Globalization refers above all to a
dynamic and multidimensional process whereby national resources become more and more
internationally mobile while national economies become increasingly interdependent.
(OECDs Handbook on Economic Globalization Indicators, p.11cited by C.S. Carson
(2006)).

Out of all these definitions the one which state that Globalization is the system of
interaction among the countries of the world in order to develop the global economy and
refers to the integration of economics and societies all over the world, involving
technological, economic, political, and cultural exchanges, which made possible largely by
advances in communication, transportation, and infrastructure, is the most common one.
Having in mind different areas of business, we can define globalization in a dissimilar way,
but no matter how it is described, globalization will drive us toward something innovate and
unexplored, which we will have to face and deal with.

2. Globalization and Hospitality Industry

The hospitality industry is by nature an international one. As international trade and

business expand, there is little question but that international linkage will become even more
important for the industry in such competitive business environment. Defining the
international hotel industry is not an easy mission. Broadly, the international hotel industry
can be defined as an industry that exports hospitality services and generates export income. In
a sense the hotel industry has always been international, because most hotels have received
foreign guests at one time or another. As the industry has evolved over the years, its structure
has become increasingly more complex with respect to range, ownership, management, and
affiliation. There are many models one may observe, such as independently owned and
operated properties; properties that are independently owned and operated with chain
affiliation; chain-owned and-operated properties; independently owned, chain-operated
properties; franchised properties; referral group properties and others (Gee, 1994).

Table 1. Characteristics of Globalization in Tourism (Feige 1998: 111)

ECONOMY

Horizontal and vertical integration strategies of tourism enterprises

Foreign investment in hotels and tourist attractions ("global

tourism markets")

Global players and strategic alliances (air companies, hotels, tour

operators)

Global tourism management

Global competition of holiday resorts

TECHNOLOGY
 Global booking systems

Standardized technologies in transport systems

CULTURE

Global tourist: uniform traveller behaviour

Creation of "global tourist village"

ECOLOGY

Tourism as "global syndrome of ecology problem"

Climate changes and their effects on destinations

POLITICS

Increasing importance of international tourism organizations

Necessity for global coordination and regulation of passenger

circulation

Sustainable development as quality and dominant idea.

Most of sub industries of hospitality industry were influenced by globalization. Here are
some examples:

Hotels: in the period between 1980 and 1998 the global accommodation capacity
increased from 8 to 15.4 million beds. The largest increase took place in Europe, it accounts
for 38.5 percent and is followed by the USA accounting for 33.5 percent. In the nineties most
hotels, around 70,000, were opened in south Asia, a 45 percent growth was achieved in East
Asia and in the Pacific Ocean. Six Continents Hotels has established strategic partnerships
with 47 global air carriers. Radisson Hotels , which are part of Carlson Group travel
companies, expanded with the help of international strategy based on SP with local hotels
worldwide, such as Edwardian Hotels in Great Britain and Movenpick in Switzerland
(Tipuri 2002: 212).
 Tour operators: global distribution network of tour operators and travel agencies is one of
the most consolidated businesses. The German TUI, former Preussag, features on the list of
the largest corporations. Preussag entered the European travel market only in 1997 when it
purchased TUI, the biggest German tour operator. One year later it bought Thomas
Cook and Carlson UK and in May 2000 the major British tour operator Thomson. Due to
anti-monopoly regulations Preussag was forced to sell Thomas Cook. C&N Touristik was
founded in 1998 when the German company Karlstadt Quells decided to start cooperation
between its TO NUR Touristic Gmbh and Lufthansa's charter air company Condor Flugdienst
Gmbh. They purchased Thomas Cook, whom they were forced to sell, if it wanted to
overtake Thomson. They decided to stop using the name C&N since Thomas Cook sounds
better (Klannik 2003: 55). In addition, in the year 2000 TUI formed a strategic partnership
with the French tour operator Nouvelles Frontierres by purchasing 13 percent of its shares. It
also entered into a SP with the leading Italian tour operator Alpitour by buying 10 percent of
its shares (Tipuri 2002, 212).

The air travel industry : air companies are merging worldwide. The five major alliances
are: Star Alliance, Oneworld, Wings, Qualifier and Global Sky Team. Everything started with
the appearance of hubs offering services to millions of passengers from smaller emissive
markets, such as Frankfurt and Vienna. Deregulation, the measure allowing flights out of the
domestic country, made it possible for air companies to fly from everywhere and in all
directions which is the most evident proof of globalization (V. Peric, 2005)

he paper provides a conceptual definition of the process of globalisation from

different aspects and in the context of causality with dimensions of microenvironment and
macro environment. The focus is on examining the intensity of impact of specific global
trends on structural market changes in tourism demand within the macro environment at the
level of demographic, cultural, political, technological and physical dimensions, and relations
with the competition, which is a prerequisite to development of new trends in tourism. The
viewpoints of numerous theoreticians engaged in this area which corroborate the main idea of
the paper were taken into account. Globalisation and its effects overlap with various fields;
therefore, the methods of explanation, description, and comparison were used in the research.
The secondary research was conducted regarding the impact of technological changes on new
trends in consumer behaviour in the tourism market, whereby the selected emitting markets in
Europe were analysed in terms of intensity of application of innovative tools. Globalization-
induced changes in the environment give impetus to new trends in the tourism market which
are evident in the emergence of new needs, behaviour of potential tourists and their
preferences with regard to the choice of tourism products for which they show more or less
interest.
Keywords: Globalisation, environment, global trends, changes, tourism market

Introduction
Globalization as a process of economic, social, cultural, and political activities crosses
national boundaries and affects tourism. ICT acts as a catalyst due to faster transfer of
information and increased networking activity that amplify the effect of globalization. Owing
to globalization, the world has become a global village, and these changes affect people
both at local and global level.

The features of the globalization process

Globalization is in the focus of scientific debates whereby different authors consider it
as a response to neo-Marxist theory of the world system (Wallerstein, 1974, pp. 86), to the
theory of dependent development (Cardoso and Faletto, 1969, pp. 28), and to imperialism
(Amion, 1977, pp. 27). Modernization theory (Parsons, 1991, pp. 18) optimistically believes
in the possibility of the Third World development, which is the starting point for Robertsons
comprehensive theory of globalization (Robertson, 1992, pp. 28). According to Robertson,
the theory of globalization is an analytical scheme which can serve as a basis for reflecting on
and describing phenomena with supranational meaning. Globalization is the process of
economic, social, cultural, and political activities that cross national boundaries (Robertson,
1992, pp. 24). According to the same author, globalization is analysed through many aspects:

108
 European Scientific Journal August 2014 /SPECIAL/ edition ISSN: 1857 7881
(Print) e - ISSN 1857- 7431

economic-geographical, ICT, universal values, global cultural industries, polycentric world

politics, global poverty, global destruction, and trans-cultural conflict.
In the context of consumer culture and interdependent financial markets, Mazarr
defines globalization as faster sales, improved telecommunications, and increased global
availability of media provided by new ICT. In the context of globalization, Mazarr reflects on
natural resources, cultural changes, bigger cities, and development of technology (Mazarr,
2005, pp. 74). The author explores the sustainability of natural resources in relation to the
size of population, and discusses the issue of availability of food, water, and energy.
Although it is assumed that trade liberalization should bring long-term benefits to
countries involved in the globalization process by specializing in activities in which they have
comparative advantage, Sugiyarto, Blake and Sinclair point out that a number of problems
may occur, such as a balance of trade deficit as consumers purchase increasing quantities of
cheaper imports, then a government budget deficit since the government receives less revenue
from lower tariffs, and finally negative impact on the distribution of income and levels of
welfare of local population, especially the poorest households. (Sugiyarto et. al., 2003, pp.
684). The same authors analyse the effect of globalization on tourism in Indonesia, and
conclude that its combination with tourism doesnt necessarily have negative impact on local
economies. They also point out that globalization and foreign tourists can reduce prices and
increase foreign exchange and local offer, thereby stimulating further development of
production. With increased tourist expenditures, globalization had positive impact on
macroeconomic trends and welfare of population. (Sugiyarto et. al., 2003, pp. 699).

Knowles, Diamantis i El-Mourhabi (Knowles et al. 2001, pp. 76) consider the impact
of globalization on tourism through global economic and demographic trends. Smeral
(Smeral, 1996, pp. 112) analyzes the effects arising from the impact of globalization on
tourism through its influence on competitiveness and tendencies to connect entities in the
tourist market whose goal is larger profit by increasing revenues and reducing costs. There is
still no particular global product for all markets in which a tourist company would operate
because of differences of potential consumers regarding: the travel experience, level of
education, level of cultural awareness and influence of tradition, and hierarchy of priorities.
Buhalis and Costa think that the success of tourism will in future be based on
connection and compatibility with other branches, and from the aspect of dynamics of
process and causality of impact, that parallel is monitored in the segment that corresponds to
the changes in demographic features of demand (Buhalis, Costa, 2005, pp 28). One of key
arguments in favour of future success of tourism relates to the necessity of understanding the
critical trends and using their positive effects while at the same time neutralizing or avoiding
the negative ones. For example, the aging of world population and active lifestyle of older
generation create new market segment. Changes in consumer behaviour of younger
generation shouldnt be neglected as better economic situation, employment and income
allow them to actively participate in tourist movements and introduce changes in preferences
focusing on new products and active participation in their creation. On the other hand,
intensive changes in the physical dimension of macro-environment (like fear of greenhouse
effect and pollution) directly affect new trends in tourist behaviour who choose destination
with safe, eco-friendly products, thus affecting new travelling trends and new motives that
will lead to new innovative products.

109
 European Scientific Journal August 2014 /SPECIAL/ edition ISSN: 1857 7881
(Print) e - ISSN 1857- 7431

The analysis of effects of global trends at the level of macro-environment, their impact
on making relations more dynamic in the tourist market and emergence of new
development trends

Globalization will be analysed in order to test the hypothesis stating that the
globalization in the tourist market will be manifested through quantitative increase in the
tourist demand market, leading to its further strong structural changes.

Pursuant to the above mentioned, the paper defines the basic hypothesis H:

Globalization, manifested by quantitative increase in tourist demand market, at the

macro-environment level functions as a catalyst for further structural changes of that market,
which is the impetus for new trends in tourism development.
To test this hypothesis general methods of scientific research were used: analysis,
synthesis, comparison, historical methods, generalization, and description. Secondary
research was conducted. Starting point was a sub thesis stating that global trends affect the
quantitative increase in tourist demand market, while simultaneously at the level of macro-
environment rapid changes occur and affect strong structural changes in tourist demand, thus
initiating new trends in the development of tourism. According to the paper hypothesis, the
impact of global trends on tourism can be analysed with regards to the following: 1.
Demographic changes, 2. Impact on environment, 3. Cultural changes, 4. Political changes, 5.
Competitiveness in the tourism market , 6. Technological changes.

Demographic changes
Demographic trends that have dominant impact on global economic flows are evident
through the aging population and important share of elderly people in developed countries
due to the development of medicine (Siegel, 2001, pp.42), and through the increased birth
rate with a slight tendency to reduce in parts of Africa, Asia, and South America where
population growth is difficult to control. Mazarr points out that in the USA and other
developed countries of the Western world changes occur at the family level in terms of more
single parents, more postponed marriages, and higher divorce rate (Mazarr, 2005, pp. 21).
Developing countries record higher birth rates, and their population is rapidly growing,
reaching the number of 7 billion people on the planet. Aging population has a strong
influence on tourist demand, as well as the fact that young people postpone marriage, which
allows them to travel more when they are younger.
Older age population will continue to increase in developed countries, and their
impact on changes in society will be increasingly important. (Ronald, 2003, pp. 170). Aging
of population will in the short term have positive effect. This means that older people will be
healthier and will benefit more from early retirement, and they will have financial resources
to spend on trips they didnt have time for in earlier stages of life. However, in the long term
there is a high probability for reduced value of pensions and increased retirement age to help
finance the growing number of retirees per employee. Although this population will have
impact on increased demand for health and medical services, they will also show special
interest in cultural activities and services typical for this type of tourism (Williams et al.,
2000, pp. 30). The emphasis should be on developing programmes for the elderly and
adapting to their needs and motives. The opinion is that the growth in the number of
pensioners could affect the tourist market in 3 ways (Vukovi, 2006, pp. 37): (1) seasonal
trips to Europe will lose their importance as this part of population is not limited to holidays;
(2) the prices will be more flexible as pensioners can adapt to the trip duration; (3) increased
importance of tourist trips at the expense of business ones because most Europeans older than
60 are no longer employed full-time. Although older population will be significant due to
their number, there are trends that are relevant for younger population. People younger than
35 are now making substantial market share (Richards and Wilson, 2005, pp. 40), and in this

110
 European Scientific Journal August 2014 /SPECIAL/ edition ISSN: 1857 7881
(Print) e - ISSN 1857- 7431

part of population there are changes significant for tourism. This group belongs to a one-
person household, while using social networks and making global contacts. Ultimately, this
leads to more cross-border and overseas trips by the population aged between 16 and 35.
Since younger people have busy work schedule, and they are under pressure due to strong
competition in the labour market, they have less free time, therefore short holiday trips with
organized offseason events are appealing to that market segment. This market segment shows
interest in the standard offer, but they are also interested in the active form of vacation
through experience and various attractive forms of adventure tourism. As a result of these
developments global tourist demand will rapidly grow in the decades to come. Older
generation with secure lifestyle, savings, and few commitments will form much of a tourist
market. Thus, product placement and production will have to be adapted to their needs to
make their stay as pleasant as possible. At the same time, lower birth rate means better
progress in the poor regions, and it is likely that developing countries could become emitting
and not only receptive (Richards and Wilson, 2005, pp.41). It can be concluded that the
fragmentation of the tourist market will be evident through the process of stratification of
tourist demand in sub-segments and market niches according to the criteria of socio-
economic features.

Impact on environment
In the past decades significant ecological changes occurred and are reflected in the
climate and environment changes. Hence, consumers turn to the eco and natural values.
Changes are not the same in all areas. In developed countries there is a tendency to
reduce air pollution, deforestation, and the use of natural resources per unit of GDP, while in
the less developed countries the reverse process occurs (Mazarr, 2005, pp. 43). While in the
north of Europe there is increased precipitation, it is reduced in the south. Global warming
leads to expanded mountain glaciers, and to more forest fires, which reduces their presence in
Europe. (Seneviratne et al., 2006, pp. 206). Also, NGOs and governments finance media
promotion of eco and social responsibility. (Adger, 2009, pp. 389).
Climate changes point to new possibilities and needs. We can assume that the
inhabitants of north-western Europe (Great Britain, Scandinavia, Germany, and Switzerland)
will continue the tradition of travelling abroad more than inhabitants of southern Europe.
Changes in tourism go in the direction of increased number of offseason trips, and the
opinion is that summer destinations are to become popular in winter. (Smeral and Weber,
2000, pp. 991). Some authors think that a tax on GHG emissions will increase, which might
make air travel more expensive and thus the cost of cross-border and overseas trips might
also increase. (Scott et. al., 2010, pp. 395). Although media present fear of global warming,
extinction of species and endemic plants, and soil devastation, Mazarr as futurist says that it
is not certain that these threats would happen to such extent. (Mazarr, 2005, pp. 48). He
claims that we will certainly face a series of disasters with limited geographic and temporal
influence, but with significant consequences on our environment. Such disasters might have a
big impact on the availability of water, food, and energy (Mazarr, 2005, pp. 60).
Tourism has lower impact on the environment and pollutes less than other activities.
However, the direct and indirect effects of tourism on environment are great, and can be
destructive for natural resources (Taylor and Stanley, 1992, pp. 341). Environmental
awareness, importance of relaxing vacation, and possibility for various activities emphasize
the attitude that entities in tourism like tour operators will have to make a serious market
analysis if they want their business to be competitive and profitable. (avlek, 1993, pp. 138).
Hence, environmental changes are one of the biggest long-term problems for tourism,
wherein the negative changes might lead to the disappearance of many destinations whose
appeal depends on their natural environment with a dominant need to concentrate activities

111
 European Scientific Journal August 2014 /SPECIAL/ edition ISSN: 1857
7881 (Print) e - ISSN 1857- 7431

around natural resources. Strong focus on sustainable development is the basis for
developmental continuity of a destination despite the increased cost of additional
investment in the preservation of natural resources and despite the need for rational
use of resources and area that would provide services and conveniences to tourists.
This refers to beaches, coastal areas, areas along rivers and lakes, and infrastructure
built for different sports. Besides the features of the existing identity related to natural
and other characteristics of the area, tourist product should at all levels integrate
additional features (in terms of programme and activities) associated with the
distinctive offer while aiming adjustment programme at the increased demand.
Globalization has a great impact on the Mediterranean, and it is necessary to
take advantage of its elements provided to tourism, which would be achieved with the
integration of possibilities into strategies and plans for tourism development.
(Trumbi and Povh, 2000, pp. 175). Sustainable development is one of the basic
prerequisites for further development of tourism in the Mediterranean since tourism in
its current dimensions and forms led to irrational and excessive exploitation of natural
resources in some localities. (Briassoulis, 2002, pp. 1068). Due to strong changes in
climate and environment, there is an increased awareness of the need to respect nature
and its resources, which can be considered a relatively new sociological phenomenon
(Farrell and Runnyan, 1991, pp. 28). There is a growing demand for eco tourism
which creates both greater offer of sophisticated products and negative phenomena
such as false eco and natural products.

Cultural changes
Culture implies all the social legacy of a group of people, community or
society, which is materialized through the learned patterns of opinion, feelings, or
activities (Previi and Bratko, 2009, pp. 86). Characteristics of culture are marked by
similar behaviour of individuals who, from the immediate surrounding based on
perception and learning, adopt the same criteria of values , build them into their way
of thinking and living, and capitalize them with specific behaviour and activities
related to the choice of product and purchase. One of the characteristics of culture is
its susceptibility to changes surrounding us, so it is important to emphasize that
susceptibility in a longer time frame.
Culture is reflected in a way people spend their time. In developed countries
there is a trend to spend more time for fun, which comes from the change in values
reflected in the shift from materialism to self-actualization, from quantity to quality,
and from passivity to interactivity. (Coates et. al., 1997, pp. 95). Cultural values affect
tourism, and new trends emerge and may be used to design new products. Due to the
fast lifestyle and intense work there is a need for relaxation related tourist products.
(Parks and Steelman, 2008, pp. 63). Internet has also created cohesion of informal
groups linked by common interests and needs met through tourist trips. It is also
possible to create highly specialized tourist products that intermediaries can represent
as specific travel arrangements, dynamic by their creation, and with programme
acceptable to geographically dispersed market segments and tailored to their
requirements.
Changes in character and structure of tourist demand are affected by changes
in the value system and lifestyle. Striving for experiences encourages tourists to
travel. For example, promotion of healthy lifestyle and food fosters ecological
awareness noticeable in the balance and harmony with nature. That approach is
contained in the concept of sustainable development which must be a part of the
development strategy.

There is a tendency towards individual approach to trip organization, where service

providers must guarantee the programme quality, and there is also a stronger interest
in programmes of those providers whose services are directly or indirectly
participating in the creation of new tourist products and their placement. Tourists
become loyal to the entities

Globalization has positive and negative impacts on the Hospitality Industry.

Table 2. Positive and Negative Impacts on the Hospitality Industry

(http://www.scribd.com/doc/8691190/Discuss-the-Impact-of-Globalization-on-the-
Hospitality-Industry)

Positive Negative
Exposure to different cultures: Due to Language Barriers: Due to globalization, the
globalization the managers of the hospitality industry can employ people from
Hospitality industry are able to learn different countries - as it is usually cheaper - they
about different cultures-as they get to may sometimes have problems in communicating
mingle with people from various walks with customers. Many customers get quite irate as a
of life - and thus, increase their result of this.
knowledge.

Larger Market: Due to globalization Cultural Barriers: As there are people from
the customer base has increased various cultures, one needs to be careful not to
greatly. People travel not only for offend them. What is acceptable by one culture may
holidays, but business, health and be frowned upon by another.
various other purposes too. Thus, this
has increased the market for the
hospitality industry, which gets its
major income from international
travellers.

Boosts the economy: Visitors come Events/Disasters in other countries: A disaster or

in and spend money - multiplier effect even taking place in one country may affect other
- and foreign exchange increases. Thus countries also. As an example, the financial crisis
it is of great value to the economy as makes less people want to spend money or travel;
globalization helps to pump in money due to increase in terrorism some visitors yet are not
into the country. ready to travel to certain countries.
Technology Advancement: Since one Seasonal Employment: During peak periods, a lot of
wants to attract as many tourists as jobs are available but as soon as tourists go back the
possible, hospitality organizations jobs disappear as well and after local population has
constantly need to upgrade and no income.
improve their product and services

Promote creativity: Organizations Increasing use of technology to communicate: Due

are constantly thinking of new and to international barriers, there has been a steady
creative ideas to attract more tourists. increase in the use of technology for communication
(through the internet, voice recording). This
removes the human touch.

More Job Opportunities: Due to Developing countries: Countries that are unable to
globalization, more visitors coming keep up with the advancement in technology tend to
and thus more people are needed to lose out. (E.g. Africa does not have the
serve and cater to their needs. So, with infrastructure or technology as yet to welcome a
the advent of globalization, there are a large amount of foreign visitors, though it does have
lot of more jobs available for people a lot of natural attractions. To increase the flow, it
within the hospitality industry. would have to improve conditions; otherwise
tourists have a vast sea of areas to choose from).

Boosts the Travel Industry: Due to Increase in crime rate: With the increase in
globalization more people move tourists, crimes such as pick-pocketing, hustling,
around, to facilitate this, the travel rape and smuggling increase too.
industry needs to grow as well. People
come to their destinations by air, or
ship, or land use the transport services
offered as well.

Variety of International Bad Habits: People from other countries sometimes

Services/Cuisines: Since there are a lot influence the local youth in a bad way. Increase in
of different visitors with various drugs and promiscuous behaviour, etc.
cultures, customs, cuisines, and
languages, the hospitality industry Environmental Depletion: Globalization causes an
includes recipes and various other imbalance in the eco system. People usually throw
services to cater to them. These their garbage around everywhere which could cause
services are available to the local too, sicknesses, to encourage more visitors, areas of
which makes it even better. greenery are cleared and wildlife killed - which is a
major cause for global warming.

Loss of cultural pride and values: To suit customer

needs one needs to change or modify various
services and product (e.g. certain dishes are changed
(in taste, names become more westernized) to make
them more attractive to visitors). This, in a way,
leads to the loss of culture as one wants to become
and behave like most of the tourists.

Globalization has increased the interdependence between countries, economies and

people. Tourism has become big business and is run by great trusts. Nevertheless, in
addition to all gratuities, globalization brought lots of challenges.

3. Challenges brought by Globalization

Globalization is, in one way or another, related to or has relevance for the many
challenges world is facing today and the discontents experienced by its population.
Whether the challenge is educational, economic or political, the rise of a global
economy is rendering national economies obsolete and creating markets that
transcend national boundaries. These changes are rippling across our lives and
focusing attention on our education systems, producing economic displacement, and
engendering intense reactionary movements. As we move into the future we can
expect that national economies will become part of macro-regional economies
(European Union and North American), and that competition across these economies
will result in, among other things, upward pressures on the skill sets of our labour
force, increases in transnational labour and its movements, and increased public
health issues for all nations.

Dramatic changes of the business environment of hotel chains due to globalisation,

advances in information and communication technology, and increased focus on
shareholder value call for modern forms of marketing. Relationship marketing and its
practitioner's equivalent customer relationship management are the promising, but
disputed replies to these challenges (Medlik, S. 2001).

Dealing with world-wide globalization trends is new to all of us. Everything is in a

state of flux: demands, labour, know-how and capital are all flowing to where the
biggest hopes for future lie, with the resultant standardization of production
technologies, business strategies, marketing plans and management styles. Although
tourism production is tied to local conditions, the tourism industry cannot avoid being
affected by globalization. Tourist products, and even whole destinations, are
becoming interchangeable; continental and inter-continental transport networks
determine the direction and speed of development; distribution channels and
reservation systems are increasingly a decisive factor in success (Muller, H. 2001).

Worldwide excess capacity in all departments of tourism-carriers, accommodation,

adventure and leisure parks, sport facilities, cultural events, etc. -is a key driving force
in globalization. Drops in tourism figures in highly differentiated national economies
(Austria, Switzerland, Germany, etc.) are largely due to the fact that almost all
national economies worldwide have discovered tourism as a development-promoting
factor and been drawn into the globalization maelstrom through the competitive
situation (A. Lockwood, et.al, 2001).

3 .1 Globalizing marketing

Formulating and implementing a global marketing strategy is a complicated task.

Expanding overseas will bring trouble sorting out the many complex issues involved,
even for those who have great experience in local markets. Good market data on
customers and competitors across the globe make the task easier. But perceptive
analysis of such data requires some managerial rethinking about customers and
competitors.
 A strong argument for companies to standardize marketing was made by Ted
Levitt, who in 1983 argued that markets were globalizing because of two factors:
global communication and technology diffusion. With satellite TV broadcasts
beaming the same programs all over the world and with instantaneous global
communications, the world is moving inexorably toward greater homogeneity of
markets. At the same time, the increasing speed of technological innovation and
diffusion make todays production soon outdated by the onslaught from global
competitors able to incorporate the latest product inventions. The joint effect of these
two forces makes product standardization not only possible but the preferred
alternative. (Johansson, J.K., 1997)

Because of the soft and impressionistic data that usually underlie a proposal for
global marketing, the global marketers need to develop and present a more qualitative
argument in favour of global approach. The focus should be the degree to which a
convergence of preferences is under way (W.J. Keggan, 2002). There are at least three
important driving points in an analysis of the global convergence of preferences:

1. Recognize that customer preferences are dynamic and changing.

2. A major driver of changing preferences is new products on the market.

3. The new standard-setting products are first introduced and tested in leading
markets.

In addition to the analysis of common customer needs there is also need to analyze
competition. The analysis of global competitors adds a level of complexity to the
analysis of domestic-only competitors. The global competitor usually has available a
wider repertoire of competitive actions, which makes for a stronger competitor and
makes prediction more difficult. Global competitors are always a threat to enter any
local market where they at the moment might not have a presence (Johansson, J.K.,
1997).

Globalizing marketing involves global coordination of marketing activities. It

involves taking a global management perspective on the marketing operation in any
country. Most typically it involves a certain degree of marketing standardization.
There are several advantages and disadvantages of marketing standardization.

Table 3. Advantages and Disadvantages of Marketing Standardization. W.J.

Keggan (2002)

Advantages Disadvantages

Cost reduction. Cost reductions gained by Off-target. Standardized products,

scale economies constitute the primary services and promotional mix are likely to
benefits from standardization. Because of miss the exact target in terms of
the longer production series there are customers preferences in any one
considerable savings to be gained in country, because customers in different
manufacturing as well as purchasing. countries have widely dissimilar tastes
and needs.

Enhanced customer preference. Positive Lack of uniqueness. Of customization or

experience with product in one country exclusivity is one of the overriding
naturally encourages a consumer to buy purchase considerations, a standardised
the same brand elsewhere. offering is in a weak position.

Improved quality. Since additional Sensitive to protectionism. Where country

recourses can be focused on the product makers are protected be trade barriers,
development effort and design, the local manufacturing may be necessary and
standardized product or service is likely to the scale benefits from standardization
be more thoroughly tested. cannot be reaped.

Global customers. There are an increasing Strong local competitors. Globalization

number of global customers who demand can also fail simply because local
uniform quality and services wherever it competitors are capable and manage to
happen to be and buy. mount a strong defence.
Global segments. Standardization fits with
the emergence of global segments.

3 .2 Global promotion

Global promotion involves a variety of activities, ranging from in-store point-of-

purchase displays and Sunday newspaper coupons to satellite TV advertising to
sponsorship of symphony orchestras and athletic events. The global sales promotion,
public relation, and publicity have also become powerful promotional tools because of
developments in global communications and the opening up of new markets. Then
there is participation in international trade fairs, direct marketing, and personal
selling, the last typically more localized, but still important (W.J. Keggan, 2002).

Public relations professionals with international responsibility must go beyond

media relations and serve as more than a company mouthpiece they are called on to
simultaneously build consensus and understanding, create trust and harmony,
articulate and influence public opinion, anticipate conflicts and resolve disputes.
Public relations practices in specific countries can be affected by cultural traditions,
social and political contexts, and economic environment. In developing countries, the
best way to communicate might be through gongman, the town crier, the market
square, or the chiefs courts. Even in industrialized countries, there are some
important differences between PR practices. In the United States, much of the news in
a small, local newspaper is placed by means of the hometown news release. In
Canada, on the other hand, large metropolitan population centres have combined with
Canadian economic and climatic conditions to thwart the emergence of a local press
(Johansson, J.K., 1997).

Effective personal selling in a salespersons home country requires building a

relationship with the customer; global marketing present additional challenges
because the buyer and seller may come from different national and cultural
backgrounds.

Sales promotion laws and usage vary around the world but may consist of any of
the following: promotional pricing tactics, contests, sweepstakes and games, premium
and specialties, dealer loaders, merchandising materials, tie-ins and cross-promotions,
packaging, trade-shows, and sponsorship (W.J. Keggan, 2002).

Table 4. U.K. Institute of Sales Promotion.

Tactic German Franc U.K Netherland Belgiu

y e . s m

On-pack price Yes Yes Yes Yes Yes

reductions

In-pack gift ?? ?? Yes ?? ??

Extra product ?? Yes Yes ?? ??

Money-off voucher No Yes Yes Yes Yes

Free prize contest No Yes Yes No No

KEY: Yes-legally allowed;?? - under review; No - not legally

allowed.

The usage of direct mail, the most popular type of direct marketing, varies around
the world based on literacy rates, level of acceptance, infrastructure, and culture. In
countries with low levels of literacy, a medium that requires reading is not effective.
In other countries, the literacy rate may be high, but consumers are unfamiliar with
direct mail and suspicious of products they cannot see.

3 .3 Global advertising

The most visible promotional activity is perhaps global advertising. Global

advertising can be defined as advertising more or less uniform across many countries,
often in media vehicles with global reach. In many cases complete uniformity is
unobtainable because of linguistic and regulatory differences between nations or
differences in media availability, but, as with products, localized advertising can still
be basically global. In contrast, multidomestic advertising is international advertising
deliberately adapted to particular markets and audience in message and/or creative
execution (W.J. Keggan, 2002).

There are several traditional problems facing the decision maker in global
advertising. One is how to allocate a given advertising budget among several market
countries. The other is the message to use in these various markets. A third is what
media to select.

But even before tackling these management decisions, the advertiser needs to
define the objectives of the advertising in the different countries. And before doing
that it is imperative that the decision maker identify what can conceivably be expected
from the global advertising effort. Thus, the logical starting point in global advertising
management is the assessment of the role of advertising in the country markets and
the alternative advertising media (Johansson, J.K., 1997).

Despite the drawbacks of standardized and translated messages, global advertising

has become an important alternative to adapted multidomestic advertising. The
technological advances in global communications, the growth of global media, and
the strength of global advertising agencies have combined to make global advertising
possible. And the possible spillovers from unified messages and the increasing
homogeneity of many markets have made global advertising desirable. As the
affluence of countries grows, new products and services appear, and customers need
more information. Advertising becomes more important and advertising expenditures
as a percentage of the GDP increase. For the global marketer, faced with increasing
spending needs in all markets, a coordinated effort with synchronised campaigns,
pattern standardization, and unified image across trade regions is usually more
effective and cost efficient than multidomestic campaign (W.J. Keggan, 2002).

3.4 Global e-marketing

E-marketing is a term that can be used to label the potential of information

technology and the Internet, and the impact on marketing. E-marketing is perhaps the
single most important new development in technology in the entire history of
marketing, particularly the ability to leap over distance. In global marketing, strategies
and practices reflected the importance of distance. The most important variable
impacting trade behaviour is distance. However, the Internet is totally independent of
distance. For the first time in history, the world has become a level playing field.
Anyone, anywhere in the world can communicate with anyone else in the world in
real time with no premium charged for distance. E-mail is major new communication
tool that supplements fax and telephone to eliminate the barrier distance. E-mail is a
marketing communication tool that offers unprecedented power for one-to-one
message for both B2B and B2C communication (Johansson, J.K., 1997).

The aim of marketing segmentation has always been to create a unique value offer
for as many customers as possible. Before the Internet, this meant, in practice,
creating an offer for a segment of the market that was an aggregation of customers.
Almost overnight, the World Wide Web has emerged as a powerful new tool for
accomplishing what in the past was only theoretical possibility in marketing: creating
marketing programs that target a segment as one. Another major thrust of marketing
in recent years has been relationship marketing. The Internet has opened up immense
new possibilities for creating a relationship with global customers, potential
customers, suppliers, and channel members. The end of segmentation means that
marketers can now focus on delivering value to the individual customer (W.J. Keggan,
2002).

In addition to increasing volatility, the move from an industrial to a post-industrial

e-economy also represent the global marketer with a new set of rules. Long
established principles, such as the emphasis of retailers in location, location,
location, are pass. People in such rigid time prefer to buy goods via the Web,
instead of spending valuable time fighting traffic to buy these goods somewhere in a
town. Looking at the changing business principles forced by the new e-economy, A.
Rangaswamy summarized the situation in such way:

Table 5. A. Rangaswamy, Toward a Model of eBusiness Performance, 1999.

From To
Market share Strategic control

Technology as an enabler Technology as driver

Seller-centric market Buyer-centric markets

Physical assets Knowledge assets

Vertical integration based on size Vertical integration based on

speed

Decreasing return to scale Increasing return to scale

Firm-centric marketing Network-centric marketing

strategies strategies

In a similar vein, Andersen Consulting stated that the new economy will force
companies to adopt some new game plans. Among the most important follow:

1. Secure a dominant market position as quickly as possible.

2. Form alliances based on their potential for market access and synergies.

3. Anticipate very high start-up investments.

4. Defend positions through an ongoing process of innovations.

3.5 Global pricing

Pricing globally is much trickier that pricing in the home market. The level of price
is often a minor headache compared with problems of currency fluctuations and
devaluations, price escalation through tariffs, difficult-to-access credit risks, transfer
prices, and price controls - all common issues in global pricing. Many of the problems
in global pricing concern host country institutional limitations that constrain strategy.
The problem is that of coordinating pricing across countries, to satisfy multinational
customers, without imposing a straitjacket on local subsidiaries and illegally fixing
prices for independent distributors.

The competitive analysis might be as simple as finding out what global and
domestic competitors in particular country maker charge for their products and
services. These prices tend to set the reservation prices in the local market, that is,
those limits beyond which firms product will not be considered and people will avoid
buying. The analysis can go further and attempt to isolate the differential advantages
that the firms product might have over these existing offerings, so-called perceived
value" pricing (Johansson, J.K., 1997).

When a company operates in several nations, the same product might appear on
the market in different countries at widely different prices. A global customer does not
usually like to pay different prices for the same product in different parts of the world.

3.6 Global ethics

There is a question about the extent to which the whole of ethics of marketing
thinking and practice is accepted. In many newly opened markets, customers are not
used to the way of Western marketing, and many can be expected to voice opposition
to the unabashed trumpeting of a firms product. It is not just the hard-hitting
advertisements that cause problems; people might find the everything has a price"
mentally abhorrent. Certain promotional activities are likely to become regulated as
the free-to-all euphoria in the new countries recedes. It will be important for
marketers to correctly read the mood of the populace and to not engage in practices
that will stir up negative sentiments. Ethical marketing is likely to be enforces much
in some of these countries than it is in the United States (W.J. Keggan, 2002).

The marketer in China is likely to find it difficult to protect a successful brand

from imitators, at the same time as will challenge the foreign influence of a global
brand.
4. Strategies and tends toward Globalization

Global hotel markets are expected to continue to feel pressure from contracting
economies and reduced leisure and business travel across much of the world in 2009.
However, despite declines across most major regions of the world in 2008, operating
performance in the global hotel industry remained profitable as hoteliers focused on
controlling costs and preserving the bottom line (Ernst & Young LLP, 2009, New
York).

The challenge, however, is larger than efficiency alone. It is also about making the
various components of the system work together and towards a shared vision. As an
initial step, one could envisage choosing just one area with which to begin and
establishing modalities for deep and permanent links between institutions that are
dealing with clearly related issues ( Najam, A., Runnalls, D., Halle, M. (2007).

Besides all marketing challenges stated before, there are numbers of others,
including operating issues (labour shortages, cost containment, increased
competition), technological (interactive reservation systems, guest-room innovations,
data mining, yield management) and economic issues (dependence upon the nations
economy).

All these issues are challenging companies around the globe in a different degree;
therefore they are also managed in a different ways. A number of international hotel
companies have sought the economies of scale attendant to developing single brands
and products, and providing them in a uniform fashion to as many markets around the
globe as possible.

Hospitality companies that seek capital from the public marketplace (a trend which
is clearly going to continue and expand) trying to function as global enterprises. Hotel
companies expanding globally confront varying traditions, structures and attitudes to
property investment and valuation in different countries.

To compete, they must pay closer attention to the trends of globalization. The
industry must reflect the requirements of the global village in many aspects of its
operations, including food, services, amenities, staffing policies and training.
Conclusion

There is little doubt that most markets in the current economic climate are
challenging at best and growth will be hard to come by most operators, said Michael
Fishbin, National Director of Hospitality Services. As a result, this year we will see
hotel operators continue to focus more of their energies on cost reduction, improving
operating efficiencies in their hotels, reaching out to guests via enhanced Internet
communication and strengthening their brands through an emphasis on green
principles in activities related to both development and operations," he added.

The message today is that it is incumbent on all hotel organizations that have
aspirations to develop brand names across national boundaries to understand what
globalization means. A truly global enterprise will have the ability to react quickly to
market opportunities, no matter where they present themselves by applying business
concepts that have been proven in a context of a global undertaking.

For the larger well-established international hotel companies that have circled the
world in the quest for new opportunity, globalization has been a strategic concept for
a number of years. International hotel companies have had to confront virtually all of
the issues facing global enterprises - and in many cases more. Unlike a manufacturer
with an overseas plant, for example, a hotel company must export its entire operating
business to function in diverse cultural and geographic settings. Hotel companies must
have the capability of establishing an entire business concept in dramatically different
local environments.

In a world moving more and more towards globalization, hotel organizations will
need to communicate more quickly, operate more productively, offer their employees
greater opportunity and deliver their customers enhanced benefits Those companies
that address these issues today will be better prepared for the global market space of
tomorrow.