THE NATIONAL PARK and the interface with KITOUT

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THE NATIONAL PARKand the interface with KIT-OUT

• Understanding demand in a difficult trading
  environment

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The National Parks (Scotland) Act 2000 setsout
the aims of the National Park as

• to conserve and enhance the natural and cultural
  heritage of the area
• to promote sustainable use of the natural
  resources of the area
• to promote understanding and enjoyment (including
  enjoyment in the form of recreation) of the
  special qualities of the area by the public
• to promote sustainable economic and social
  development of the areas communities.

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Loch Lomond The Trossachs National Park
Guiding Principles

• Conserving and enhancing the special qualities
• Improving the quality of life
• Promoting a quality experience for everyone
• Promoting responsible use of resources and
  addressing the challenge of climate change
• Working together, delivering the Plan

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Activities organised under 5 themes

• Climate Change
• Responsible Enjoyment
• Place Marketing
• Rural Vibrancy
• Leading and Innovating

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UNDERSTANDING DEMAND
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Where are we
8th February 2007
2nd January 2008
19th January 2008
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UK economy
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Stagflation?
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Exchange Rate favours Euro inbound

• Euro value has strengthened since Summer 2007
  due to inflationary pressure holding interest
  rates..
• Impact greatest in London
• US Dollar begins to rally.
• Sterling position dependent on MPC tackling
  Inflation or growing economy.

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Energy Price pressures continue

• Remote rural and highland areas have seen
  significant reduction in visitation recent
  months.
• The price in UK of unleaded fuel and diesel has
  reduced propensity to travel
• Urban tourism will be impacted on by reduction
  in economy air connections
• Some evidence of coastal revival (South West and
  South East England)

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Food Price affecting input costs

• Food Price Inflation is impacting on
  discretionary spending
• Impact is greater on lower income families, less
  so higher income families
• Discretionary spending sectors, such as hotels,
  pubs, catering and retail are also exposed
• At the top end of the quality scale, demand
  impact should be minimal, and increased costs can
  be, at least partially, passed on to consumers.
• In the lower end of the market, however, input
  price pressures will be met with resistance from
  a clientele who will suffer more than most from
  more generally increased food price inflation.
  Pressure expected in fast food, casual dining and
  restaurant sector.

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UK Outbound Trends

• UK outbound visits stayed static over 2007 with
  spend increasing.
• Rest of world saw visits increase 8. Europe
  saw 1 increase. North America (particularly
  cities) saw increased demand from UK and EU
• Sterling weakened against Euro and most other
  world currencies
• Mirrors domestic tourism trends

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UK Inbound Trends

• Overseas visits to UK stayed static over 2007
  with spend increasing.
• European Visitors increased 2, North America
  declined 6 and Rest of World stayed the same.
• The cost of a tourist visa to Britain has risen
  from 72 to 126, which, will understandably lead
  to a drop in the number of applications compared
  to the value of a Schengen Treaty visa

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Example Scottish Tourism 2007-2008
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European Prospects

• Inflationary pressures present in EU as
  elsewhere.
• Strong Euro impacting on Exports but good for
  outbound travel.
• EU Growth forecast for 2008 reduced from 2 to
  1.8
• Consumer confidence declining however
• Scandinavian countries seem less pessimistic

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US Prospects

• Rising unemployment and declining property
  values are eroding consumer confidence
• Perception is the economic downturn is expected
  to be medium term and recovery is anticipated to
  be weak and slow
• Slower job growth, increased savings,
  constraints on credit availability, and
  widespread declines in home values will restrain
  spending growth well into 2009-2010

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UK Prospects

• Consumer Confidence is falling.
• However consumers remain positive about
  employment conditions
• A reluctance to invest in major purchases exists
  (houses/cars) but only a minor decline in white
  goods household purchases is present.

• Consumer Confidence drop related to rising food
  and fuel prices
• Slowing housing market also impacting on
  consumer outlook

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In Summary

• 2008 a tough year for Tourism
• Collapse of housing market
• Tighter consumer spending in UK
• Regional markets unlikely to change
• Summer holiday remains an essential purchase
• Employment situation evidencing impacts
• Slowdown currently affecting financial sector,
  construction, housing

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In Summary

• 2008 Data London showing positive growth in EU
  inbound
• England (South/ South West) reasonable summer
  bookings
• Scottish English Travel Industry recording good
  outbound traffic June, July, August
• Potential for Scottish Rural ?

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But I still go on holidays

• ABTA Survey 6 Oct 2008
• More than 80 of consumers who travel abroad are
  planning to do so again within next 12 months
• 47 will not change travel plans because of
  recession
• Strength of Euro acting as a deterrent
• Opportunity for Scotland

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Given the bleak economic outlook what can we
anticipate for National Park Tourism in the future
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Changing Worlds
Trust Security
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(No Transcript)
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World Tourism Not Such a Lonely Planet
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Source Yeoman et al 2008 / UNWTO / Mintel
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Creation of Tourism Economies
Climate
Prosperity and affordability
Globalisation competition
Accessibility
Events
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Perceptions of luxury
Anxiety society, health and safety
The experience economy and authenticity
Time pressures
Longevity
Consumer drivers shaping tourism
Technology
Environment
Individualism
Image and brand
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The Tourist
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Sub Sectors of Demand

• Health Tourist
• Food Tourist
• Natural Heritage Tourist
• Active
• Aged - Aged / Active
• Females
• Child Centred
• Grand Tours
• Family

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Sub Sectors of Demand

• Health Tourist
• Food Tourist
• Natural Heritage Tourist
• Active
• Aged - Aged / Active
• Females
• Child Centred
• Grand Tours
• Family

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Tourism Demand Authenticity

• Ethical
• Natural
• Honest
• Simple
• Beautiful
• Rooted
• Human

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The Affluent Traveller and Space Tourism
Millionaire
Enthusiasts
Passionate
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Retail and Tourism Shopping in Dubai
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Eco Tourist ?
Correlation between levels of ethical
purchasing and wealth in Europe, by country
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Tribes v Families
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A complex and Dynamic Marketplace

• Hard to forecast
• Clear evidence of growth and contraction
• Consolidation and reduction in supply
• Centrality of leisure / holidays but nature of
  activity changes

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Trends in tourism demand help us understand this
complex marketplace

• The idea of small, boutique, unique accommodation
  offers catering to the luxury market is not bourn
  out by supply changes
• The idea of searching for the unspoiled, isolated
  and escape destinations have in the past
  characterised our stereotype of luxury
• The rejection of over-development and congestion
  appeared to epitomise expenditure in luxury
  markets

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Contra-indications in Supply

• There would appear to be growing evidence for the
  contrary in recent supply shifts
• This is best characterised by Dubai the capital
  of superlatives in tourism
• One of the worlds most prominent destinations
• It has been developed and continues to grow on an
  epic scale

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Dubai

• Indoor ski runs in the desert
• Theme Park development 2 x as large as Florida
  Disneyworld
• 100s of man made islands
• 6 Runway airport

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Does Dubai work ?

• 2007 6 m visitors
• 2010 15 m visitors
• Luxury v Mass Luxury
• Everything is a luxury nowadays
• Issues of authenticity and sustainability

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Dubai

• In 10 years has become a watchword for quality
  and service in the international tourism industry
• Airport deals with 25m visitors per annum

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Atlantis, Dubai

• 750 m to develop
• Located on the entrance to the Palm
• Bridge Suite 18,000 per night
• Largest number of inbound visitors are from the UK

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Imitation

• Many locations aspire to recreate the Dubai
  phenomena through the creation of mega-resorts
  catering for high spenders

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Imitation

• IRAN Flower of the East, 17 m Euro development
  Kish Island

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Category Killer

• CHINA Hainan Island Chinas Hawaii
• 18 Golf course (10 more planned)
• 50 Hotels (15 more planned)
• 200m 7 star hotel (2011)
• Major market China domestic

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Island Paradise

• CAMBODIA
• 99 year leases for sale on 61 islands
• 5 islands sold for 627m

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Wilderness Appeal

• MOROCCO
• Coast 6 resorts being developed
• 160,000 beds
• High Atlas Mountains Ski Resort
• 3,800 beds, 300 retail units, 25,000 sq mts. of
  conference facilities

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Is the demand sustainable

• Commercially ?
• Global Tourism worth 6.5 trillion per annum
• Annual Growth 4.2 per annum over years 2007-2017
• Environmentally certainly not.

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Contra-indications of New Luxury

• Concern with quality and facilities
• Spa as an essential
• Concern with value for money
• Mix of products and services fly cheap eat
  expensive

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Contra-indications of New Luxury

• Dubai and Abu Dhabi development of cultural
  facilities Louvre and replication of Lyon
  heritage
• Cultural, educational and artistic elements to
  increase destination offer

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What the individual says ?

• Why visit a destination ?
• Atmosphere
• Experience
• Distinctiveness
• Authenticity v Mass Luxury
• Spa may be the new swimming pool

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What the individual wants ?

• When does space become a luxury ?
• Contra-indications for the Dubai offer

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Luxury and Politics

• In the past people believed that McDonalds and
  Pizza Hut could break down political barriers and
  unite the worlds cultures
• In fact, the great unifier - luxury brands
• Fake Armani from China to Croatia, Africa to
  America

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The centrality of the visual landscape

• CLUE The centrality of arresting visual images
• All aspects of our lives are filled with visual
  culture leisure, entertainment, shopping, food,
  tourism and travel
• The world becomes a picture that distinguishes
  the essence of the modern age Martin Heidigger

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The centrality of the visual landscape

• The average US citizen watches 4 hours of TV per
  day
• US consumer 28 hours per week
• EU Internet consumption 14.3 hours per week
• The range of channels of communication has
  increased at an unprecedented level
• Centrality of technology

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Visual Culture for Youth

• MySpace Facebook Bebo Twitter
• The similarity to Scrap Books self expression
  that leads suppliers to consumers through
  tracking and data mining
• Centrality of Technology

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Tourism and Visual Representation

• How is your product and service perceived
• Use of iconography, images, dynamic visuals

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Defining Appeal for the future

• Space
• Authenticity
• Simplicity
• Escape and Contact

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Developing distinct quality experiences

• In our efforts to create original or distinct
  experience what often occurs is a process of
  serial reproduction
• These unique luxury experiences echo the worst
  elements of globalisation and the ersatz nature
  of the shopping mall
• It will be about offering a counterpoint, an
  alternative

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Environmental sustainability

• The appeal of the simple offer, Reduced facility,
  Natural appeal
• Eco-products 70 of tourists agree that it is
  more important for hotels to be more
  environmentally conscious
• Eco-tourism growth 25 per annum

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Becoming Consumer Centric

• Do not take lessons from industries that do not
  evolve
• The centrality of customer retention is at the
  centre of the Amazon.com approach
• Jeff Bezos the retention of 5 of customers
  can impact on profit by 125

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Kit-Out is there already

• Sustainable Bunk Houses
• Waste systems for attractions
• Sustainable accommodation
• Renewable Energy
• Energy Efficiency
• Building and insulation

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Kit-Out is there already

• CRM System Development
• GPS System development
• Food Testing
• Packaging
• Composting

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Understanding affluence

• Real affluence today is often measured not by
  what you own but by what you do and where you go
• PWC Luxury Survey 2007
• People living busy urban lives in NY, London,
  Tokyo are increasingly inclined to remote /
  escape / rural destinations
• National Park Opportunities

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Becoming more consumer centric

• Cementing the connectivity
• Building the personal relationship in the
  impersonal world
• The difference between a hand written letter and
  an e-blast is a clue
• Sustainable / Natural and Authentic
• The ethos of the KIT-OUT Projects

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Understanding the supply DNA

• Ease of access to consumer
• Ease of purchase for consumer
• The distinctive experience building of high
  trust relationships
• The importance of repeat and loyalty
• The centrality of Technology and People
• KIT-OUT should help here

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Enough from me

• Your comments or questions are of course welcome
• J John Lennon
• Moffat Centre for Travel and Tourism Business
  Development
• www.moffatcentre.com