HOW TO SUCCESS AS A TOURISM DESTINATION IN VOLATILE WORLD

After the financial crisis of 2007–08, the global economy faced its deepest setback in decades. Although
economies have recovered, volatility has remained a key risk to further development—financially, economically, politically, and environmentally. Sovereign debt crunches get worse, political instability is growing in the world’s hot zones, and environmental disasters tend to grow more severe in their short-term impacts. In addition, other forces—less dramatic but no less powerful—continue to reshape the world’s future. The ongoing digitization of daily life has sped up the dissemination of news; as a result, consumers
are developing more flexible buying decisions and conventional ways of doing business are being fundamentally challenged. Established economies are increasingly feeling the impact of aging populations
through the growing pressure on social care systemsand the changing requirements needed to meet the
mobility, housing, and leisure habits of older people. At the same time, new demand is unfolding in developing regions such as the BRIC countries (Brazil, Russia, India, and China) and beyond, changing the profile of the international traveler. All these changes will have significant impacts on tourism destinations.

Policymakers responsible for developing and growing their nations as successful tourism destinations
face a large variety of change drivers in their home countries and in key tourism source markets. They
will need progressively more and more sophisticated methods to nurture the development of the tourism
sector successfully by increasing inbound tourism. In a world that is ever more volatile and an environment
that is ever changing, new capabilities in tourism management and sector development are vital if an
economy is to become more resilient against disruptive events and to prepare for long-term stability.

Long-established destination-management techniques such as advertising campaigns or the presence of industry fairs are increasingly being displaced. Communicating with travelers online through various direct or indirect channels requires many destination managers and developers to redesign their existing marketing capabilities. At the same time, destinations need to rethink their positioning among competing countries to prepare for short-term demand shocks and long-term shifts of traveler flows. In the past, a narrow focus on attracting the maximum number of budget tourists in markets such as those of Bulgaria, Egypt, and Spain drove strong growth. However, this focus brings extensive risks, including break-neck competition, environmental exploitation, and unhealthy investment bubbles. Moreover, investment in infrastructure faces new obstacles. Ecological, regulatory, fiscal, and sociopolitical constraints often hinder ambitious expansion.
Largescale projects are increasingly complex and difficult to manage. Examples of such large projects that have proven unwieldy are recent European rail and airport projects such as the Berlin airport, which has had
multiple problems and delays. Many destinations are still catering their touristic offerings to very few, mature source markets—and such destinations risk losing touch with tourists from emerging source regions such as Asia, Russia, or Latin America, whose needs differ significantly from those of the typical Western traveler. For example, introducing sophisticated methods of demand segmentation and profiling to attract the growing number of Chinese travelers will become increasingly important.


All these challenges have affected Travel & Tourism (T&T) in recent years, but they have not stopped the
overall dynamic in the sector, which is driven by desire to travel abroad, visit foreign places, or just relax. Travel & Tourism remains a strong engine of growth, representing nearly 10 percent of global economic activity if all adjacent services are taken into account. Instability is a new reality that carries opportunities as well as risk. This is why tourism destinations, policymakers, and private-sector stakeholders need to act decisively to develop the right capabilities to succeed going forward.