Introduction
European countries are now becoming popular tourist destinations in the world with its world-class art museums, opera theaters, historical buildings and architectures. Europe, being the continent of the tourism-famous cities Paris, London, Rome and the Vatican, has been considered to be the destination and must see for travel and leisure aside from its rich culture and history since it has been the home of the famous Shakespeare, Da Vinci, Michelangelo and other artists and scientists that emerged from Europe.
Geographically, Europe can be divided into main tourist regions such as the Western Europe which includes Ireland, Germany, The United Kingdom, France, Monaco, Belgium, The Netherlands, Luxembourg, Liechtenstein, Andorra, Switzerland and Austria; the Northern Europe including Iceland, Norway, Denmark, Sweden and Finland; the Southern Europe including Portugal, Spain, Italy, San Marino, Greece, Turkey, Malta and Cyprus; and the Eastern Europe including Poland, Estonia, Latvia, Lithuania, Belarus, the Czech Republic, Slovakia, Hungary, Slovenia, Bosnia & Herzegovina, Croatia, Albania, Yugoslavia, Montenegro, Macedonia, Romania, Bulgaria, Moldova, The Ukraine and Russia (Ratz, 2004).
Tourism in Europe is generated mostly in Germany, United Kingdom, the Netherlands, Sweden and Austria (Ratz, 2004) mostly part of Western Europe except from Sweden which belongs to Northern Europe. Countries from the Southern Europe are known for their rich religious heritage and famous artists aside from the mythologies that exist in Greece and Turkey.
While Western, Northern and Southern Europe have established tourism industry, the Eastern Europe is still on its rise on becoming a popular holiday destination. This study focuses on the Eastern Europe being a holiday destination. The paper discusses the attractions in the region and the reasons behind its emergence as a destination. The paper covers its positioning and segmentation of the travel market to establish the potentiality of Eastern Europe as a holiday destination.
Literature Review
Tourism is a major source of wealth to many countries today and plays a role of integrating people and countries together. In Europe, tourism raises the awareness of Europeans of their own cultural and natural heritage through the very diversity of that heritage (Stepova, 1997). With this statement, it can be stated that the principal tourism market for all European countries is composed of their own people and that domestic tourist activities in most European countries generate more income for the tourism industries than the incoming markets through holidays, short breaks and all forms of business tourism (Ratz, 2004).
While Western European countries are enjoying the benefits of tourism for a long time now that are brought about by markets from other European countries and the market outside Europe, the tourism in Eastern European countries is still in its infancy largely because of the lack of adequate infrastructures and poor marketing which are extremely important in the tourism industry.
In this paper, literature review section deals with the factors that influence tourism marketing and competitiveness, and the market segmentation and positioning of tourism. The two parts are discussed in such a way that the relationships of each other are clearly presented.
Factors Affecting Travel Destination Choices
Many tourism studies have given much importance on knowing why people travel, which destinations they choose and the factors that play an important role in the selection of vacation destination (Orth et al, 2002). Much of the tourism studies have been focused on the push and the pull factors (Mak and Moncur, 1980; Kucukkurt, 1981; Shih, 1986; Davis and Sternquist, 1987; Chun, 1898; Um and Crompton, 1990 on Orth et al, 2002). Push or motivational factors enable potential tourist to develop attitudes toward traveling while pull factors refer to the attractions in destinations.
According to most studies (Aaker, 1989; Porter 1990; Crouch and Ritchie, 1999; Dwyer &Kim, 2006), success in tourism marketplace lies on the overall attractiveness and the experiences a destination delivers to its visitors. The strength and weaknesses of a tourism destination can be recognized through determining the factors underlying destination competitiveness. Destination competitiveness determines the ability of a destination to attract markets and is linked to the ability of a destination to deliver goods and services that perform better than other destinations. Crouch and Ritchie (1999) develop a model that lists the factors that influence tourism.
The model comprises of the Core Resources and Attractors which include the physiography and climate, culture and history, market ties, mix of activities, special events, entertainment, and superstructures; the Supporting Factors & Resources which includes the infrastructure, accessibility, facilitating resources, hospitality and enterprise; and Destination Management which enhanced and capitalized the core resources and the supporting factors. Destination management includes activities of destination management organizations (DMO), marketing management, destination policy, planning and development, human resource development and environmental management. Also consider in the model are the micro-environment competitiveness, global competitiveness and the qualifying and amplifying determinants such as the location, interdependencies, safety/security, awareness/image/brand and cost/value.
Lohmann (2004), a European professor for Consumer Behavior argues that the demand factors for tourism can be looked at from two perspectives: those factors influencing the demand such as the motivation to travel and the ability to travel that are influenced by general economic situation, politics, or technological innovations that should be met in marketing and planning; and those emerging factors such as changing face of consumer behavior in tourism. All these factors are generally linked to each other and one has influenced over the other.
Economic situation is one factor that influences tourism in a destination while economy is influenced by economic activities, jobs, industry, policy and law as well as the technological innovation and political stability in a country. The economy of a country may also provide and overview of what a destination can offer, the prices of the goods and services and the available resources that may satisfy travelers and tourists (Mak, 2004).
Technology is another driver of tourism. As stated above, tourism integrates people; same is true with technology. With the technology today, tourism is easily market and promoted via the internet or any communication gadgets available today while development in transportation makes traveling to different places possible.
Transportation is fundamental tourism for without transport tourism will only become a local leisure that can not generate much for the country’s economic development. As stated by Middleton and Hawkins (1998), for any given destination, the type of transport used and the current state of technology plays a vital part in determining the capacity, volume, segments, value and characteristics of tourism. Air transport represents the main mode of international tourism while land or water transport for domestic tourism.
Emerging trends also contribute to the factors affecting demand on tourism. New source market is under this category (Lohmann, 2004). New source market is basically the emergence of a new destination that used to have no tourism industry but due to political, economic and social changes has been developed as a new tourist destination that has the potential to attract new and old market. As a newly developed destination, there will be growing interests for trips and vacations to this place. These interests will provide opportunities for the destination to market the place by giving the travelers and tourists the experiences that will make them come back to the place.
Demographic change is another emerging factor for the determination of tourism demand. It is said to be one of the important drivers for new trend in consumer behavior in most European countries (Lohmann, 2004).
Two important demographic trends are often in publications: an older growing society due to rising life expectancy especially in developed countries (Lind, 2001; OECD, 1998; Ruskin, 2002; Wallace, 1999; Horx, 2002 on Lohmann, 2004); and a declining number of children due to sinking fertility in many industrialized countries combined with the dissolution of traditional family patterns (Lind, 2001; Wallace, 1999, Schafers, 1995; Horx, 2002 on Lohmann, 2004). Other important demographic trends are: rising educational level, a different and changing society due to migration, and the changing role of woman.
These factors may have effect on the tourism activities and the choice of destination of these market segments. Older people may not necessarily change the destination they usually go to during their younger years but the kind of activities they do will definitely change. For example, if they use to go mountain climbing or beach surfing, they may not be able to do these activities at the time they become 50 and above.
Educated peoples’ activities or travel destination may differ from those who have lower educational level; educated people and those who belong to higher class of the society may prefer watching opera and concerts and visiting historical places for the purpose of enhancing their awareness on culture and history while people with lower educational level as well as the children may prefer visiting theme parks. Family patterns may also dissolve and change over some time. There were times before that family enjoys going on vacation together but as time change, children prefer traveling with their friends with different activities from the activities done when with the family.
Moreover, the attractors in a destination are the primary factors that affect the marketing of a destination. The attractors and sites in a destination is the basis of the activities. For example, Macau’s main attractor is its gambling industry that attracts many tourists and foreign travelers and has been the destination’s key source of revenue (Gaming Control Board, Macau SAR, 2003). Currently, the gaming industry in Macau can be compared to the industry in Las Vegas, coining Macau as the “Monte Carlo of the Far East”. The gaming industry in the place has its roots from its history and has been a popular tourism activity in Macau since the development of infrastructure in the place.
Same thing is done with other destinations; they made tourists attractions out of the resources they have. In Europe, mostly historical places, cultural heritage, churches and art museums are the main attractors that had been built and rooted from the ancient history of the region aside from the developed and improved parks and landscapes.
In the integrated model of destination competitiveness developed by Dwyer and Kim (2006), the Crouch-Ritchie model was revised, categorizing resources and attractors as inherited and created. Inherited resources are basically those that are naturally exists in the place such as the natural resources, wildlife, beaches, and mountains; and the cultural/heritage resources that has been built centuries ago that reflect the culture and history of the destination. Created resources, on the other hand are those that are built to make inherited resources useful and accessible and to enhance tourism and leisure in a country. This includes tourism infrastructures, special events, range of activities, entertainment and shopping.
The term infrastructure is often applied strictly to structures and utilities underpinning operations of a firm or industry (Pigram, 2006). Tourism infrastructures includes hotels and lodging facilities, transport services and route ways, telecommunication facilities, resorts, commercial centers, restaurants, museums, theaters, convention centers, health and welfare, and other utilities that provide convenience and services to tourists. These infrastructures need to be flexible and resilient in order to respond to the demands of the market of tourism. Tourism infrastructures are provided by the local government and some private sector. Just as what the US Department of Commerce stated “the best and most attractive destination will not meet its potential unless there is transportation to get there, adequate lodging and food service for visitors, and public facilities to support both visiting and local populations”.
These infrastructures are one of the bases when marketing a destination and in market segment that can be attracted in a destination. For example, a very urbanized destination like Hong Kong can target the market of businessmen who often attend conventions and trade fair shows as well as the market of children in Asia because of the Hong Kong Disneyland. On the other hand, a tourist destination which has infrastructures that are mostly resorts and has beaches and mountains like Phuket in Thailand can target the market of teenagers, young adults and families as well as the adventurous and sports minded individuals.
Human resources who provide the services offered by the tourism industry also plays key role in marketing the tourism industry. Tour guides, hotel and restaurant staff, people that are related to transportation from the airport to the land transport are the human resources that deal with the tourists directly and give the tourists different experiences. Usually, those destinations which have friendlier and more accommodating people attract more tourists.
Moreover, development and promotion of tourism as well as the sustainability of a destination’s tourism lies in the hand of the government and tourism authorities as well as in the organizations that promote tourism in the region.
Market Segmentation and Positioning
All the factors from various literatures provide overview on the competitiveness of a destination. Application of these factors in the analysis of a destination makes marketing positioning and segmentation in the tourism industry effective. Parts of the marketing plan are the assessment of factors that may affect the marketing efforts as well as identifying the resources available (Mahoney et al, 1987). After the factors and resources have been identified, market segmentation and positioning can now take place.
According to Mahoney and Warnell (1987), market segmentation is the process of taking existing and/or potential customers/visitors (market) and categorizing them into groups with similar preferences referred to as market segments. It is also the designing of marketing mixes or strategies which are the combination of 4 Ps of marketing (product, price, place, and promotion), which satisfy the special needs, desires and behavior of the target markets (Mahoney and Warnell, 1987). One can not formulate the best combination of the 4 Ps and the effective marketing strategies without the awareness of the factors noted above but with the awareness of the factors, barriers in the emergence of a destination in the marketplace can be recognized and improved.
The tourism market may be segmented according to: location of residence, demographics, important product attributes and lifestyle attributes (Mahoney & Warnell, 1987).
Ashworth and Voogd (1990) made the three basic classifications of segmentation strategies: the concentrated strategy, that focuses on one specific target market and which most important part concerns the identification of the particular characteristics of the selected market, in order for a destination to meet the perspective image that this market has for selected destinations; the differentiated strategy, by choosing various target markets and applying different strategy to each market; and the undifferentiated strategy, when the treatment to target markets are the same for all, offering a stable process for each of them separately.
After market segmentation, market positioning can now be proceeded. Market positioning is defined as the process of identifying and selecting markets or segments that represent business potential, to determine the criteria for competitive success (DiMingo, 1988). This should be based on a thorough knowledge of the benefits offered by the destination that meet the needs, wants, and perceptions of the target market. Positioning also refers to the process of establishing and maintaining a distinctive place in the market for an organization and/or its individual offers (Lovelock, 1991). Based on the realistic assessment of the destination’s position in the market (strengths, weaknesses, competitors), the decision can be made on to what market segments to target and how to market the destination (Orth et al, 2002).
A market positioning research requires an evaluation of the image that customers have of a tourism destination (Chacko, 2006). Chacko also pointed out that if the target market does not perceive the image, the image does not exist and if the target market does not believe that what a destination has to offer are benefits, they are not benefits. Also if these benefits are not different from other destinations, differentiation has not succeeded and competitiveness does not exist. Unlike any product to be positioned in the market, tourism is intangible which benefits depends on the perceptions of the individuals experiencing the benefits.
Research Methodology
In order to establish and present a reliable research, the author gather data from reliable articles, journals, books and reading materials that present facts and conducted in-depth studies about tourism in Eastern Europe. The best way to gather information for any research is to first read back on earlier researches or studies. Having an ample amount of facts based on proven studies will give the paper credibility. Facts that are stated on the sources used help the researcher formulate conclusions supported and accepted by the tourism industry or the conclusion can act as supporting evidence to the earlier studies. These earlier papers also help the researcher determine whether or not the findings that he has were already stated or are they new.
With this research, statistical data on tourism in Eastern Europe from a reliable market research company and from the World Tourism Organization, an organization which is an agency of the United Nations and a leading international body in tourism, were obtained. Other facts and figures were obtained from published research articles that conducted research on European tourism. Some articles used in this paper focused on particular countries in Eastern Europe like Czech Republic and Hungary but also presents reliable data on Eastern Europe as a whole. The paper incorporates these data from different sources to present findings about tourism in Eastern Europe. Most of the authors of the sources are from Eastern Europe themselves while other article is from a regional representative of WTO for Europe, making them aware of the real situation of tourism in the region.
Findings
Holiday tourism and tourism in general has become an important sector in Europe. The Eastern European countries have been the new source markets for European tourism especially with the joining of Poland, Hungary, the Czech Republic, Estonia, Latvia, Lithuania, Slovenia, Slovakia, Malta and Cyprus with the European Union, EU, on May 1, 2004 (EC, 2003 on Lohmann, 2004) while Bulgaria and Romania hope to do so by 2007 (Ratz, 2004). The joining of these Eastern European countries has provided the EU a 5% GDP growth in 2003. Joining in the EU would mean a better tourism policy and access to information and cooperation with its members. Membership to EU introduce new market segment to old EU members as well as to Eastern European countries mentioned.
After most countries of Eastern Europe had thrown off communism in 1989, freedom to travel has become available and tourism in the region has bloomed. After the political changes in the early 1990s, Eastern Europe emerged as a new and interesting tourist destination (Kiss, 2004). Tourism in the region is currently an important source of foreign exchange revenue and has become a stable element in the local economies (Kiss, 2004). The rate of employment has risen to 8-10% and investments in the tourism sector have amounted to approximately US70 million (Kiss, 2004).
Market Segments
In most materials (Cabrini, 2003; Kiss, 2004) that focus on the market of tourism in Eastern Europe, the market segment of tourism in the region is classified into two: domestic or the locals of countries in Eastern Europe itself, and international or inter-regional markets or the markets from Asia and the Pacific, America and other regions of Europe.
Currently, domestic market is the dominating market segment of tourism in Eastern Europe, typically local and repeat visitors that do not need visas and those that do not have difficulties dealing with the local language of the region (Kiss, 2004). During the regime of communism in the region people were not given much freedom to travel. This could be the reason why the locals of the region, after the fall of the politically socialist system become fascinated and interested to travel and see most of the region’s attractions.
About 23.8% of the people of the Czech Republic are known to spend vacation at lakes, 15.3% at mountain resorts and 13.3% travel or visit relatives and friends within the country. Croatian people was found out to spend their holidays in their own country which 71% of them enjoy the seaside while 11% visit the capital, the Zagreb, a big Croatian tourist destination rich in cultural and historical monuments from he pre-historic, museums and galleries and 2.8% of the Croatians stay in spa resorts. The 87.5% of the people of Poland like to spend more than 5 nights as tourists in their own country while in Slovakia, 38.1% of the locals typically visit the mountains and 27.7% like the lakes and rivers as the holiday destinations (Kiss, 2004).
Moreover, according to the World Tourism Organization (Cabrini, 2003), of all the European sub-regions, Eastern Europe is the most dependent on intra-regional tourism. Significant tourist flows include those of Slovenians to Croatia or that of Czechs and Polish to Slovakia (Kiss, 2004).
For international arrivals, The Czech Republic is the number one tourist destination for the American markets, followed by Hungary. Bohemia and Poland used top have the largest Jewish communities in the region, making these countries popular to tourists of Jewish origins to see the remaining Jewish heritage. Prague, the famous capital of the Czech Republic and the capital of Hungary, the Budapest are also he most visited places among the Japanese tourists.
Market Position
Eastern European countries offer diverse range of travel experience. Like in other famous cities in Europe, Eastern Europe also has cultural heritage in Croatia and in Poland while Budapest, the capital of Hungary is also called the Paris of the Eastern Europe with ancient cities, beautiful churches and synagogues aside from the 22 wine regions in the country worth visiting for (Great Holidays and Hotels, 2006). The region also offers rural tourism which is an important asset for Eastern Europe, with its natural resources, mountains, lakes, rivers and forests accompanied by rural activities like climbing, riding, fishing and cycling (Cabrini, 2003).
One of the strengths of Eastern Europe compared to other holiday destinations is its being inexpensive compared to most major Western European cities and to North America and Japan. Also, one major area of travel growth is the taking of shorter and more frequent breaks. The opening of Eastern Europe with new and fresh close-by destinations and the low cost carriers that made travel to cities faster are the drivers of the trend toward cheaper, shorter and faster business and holiday travel (Poon, 2003). Lower cost destinations such as the countries in Eastern Europe like Bulgaria, Croatia and Slovakia have experienced increased in popularity due to this trend.
According to the Global Insight (2003), an international company for market research, Eastern European tourism will post above-average growth rates from 2004 due to the accession of most regions into the EU and is driven by factors such as stringer business ties, open access, improving investment climate and stronger economic growth. Global Insight also estimated an average annual growth of international arrivals of more than 4% which was proven by the World Tourism Organization (Cabrini, 2003) that recorded a 4% increase in international arrivals to Eastern Europe in 2002. For the year 2020, WTO estimated 223.3 million international tourist arrivals in Eastern Europe which would require 4.2% increase per year and would help maintain Europe’s position as the strongest destination in the world (Kiss, 2004). Croatia is expected to have the biggest share while Hungary is expected to have the smallest share in tourism arrivals.
In the above data, Central/Eastern Europe showed increasing international tourist arrivals from 1990 to 2003 outperforming Northern Europe. The over 68 million international tourist arrivals in 2003 is an increase by 5% over 2002, consolidating its leading position in Europe, growing for the second consecutive year at a faster pace than Europe as a whole (Cabrini, 2004). The largest part of international tourism is originated from countries in the region, consisting mostly of trips between countries that are near to each other or share a border (Cabrini, 2004).
However, there are still barriers to fast development in tourism in Eastern Europe according to some experts (Lohmann, 2004) like low investment rates, underdeveloped traffic system and infrastructure in the countryside, unsatisfactory quality of hotels and weaknesses in marketing although currently the region utilizes the internet for marketing.
Conclusion
Based on this study about the market segments and position, Eastern Europe is on its rise to become a popular holiday and tourist destination mainly because of the trend toward cheaper travel and the inexpensive cost of travel which is the region’s primary competitive advantage over other destinations. Generally, countries in Eastern Europe offer attractions that are also offered by other famous cities such as historical and cultural arts and museums as well as rural tourism but Eastern Europe has differentiated itself through its affordability. As an emerging market of tourism, the region is also perceived by most as an interesting place to visit driven by the curiosity of, as a former socialist community, how the region differs from other regions in Europe. However, the region seems to be in its infancy regarding the services it offers such as quality of hotel and hospitality across the region. Improvement in marketing and service quality should be further be taken into consideration for the Eastern Europe to establish a strong position in the tourism market and to maintain the market segments it has gained.
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