Santani Wellness Resort

1. What motivated the company to market overseas?

As Sri Lanka ends the year reeling from the most shameful political fiasco in its
postcolonial history, we have shown yet again that we are much more capable of harming
ourselves than any external force our politicians constantly blame. Unfortunately, this is
the same with the tourism industry. While the whole world is trying to promote Sri
Lanka as one of the world’s top destinations—from New York Times in 2011 to Lonely
Planet this year—the country remains a 2 million arrivals destination nearly 10 years after
the end of the war.
In contrast, Langkawi, a tiny island off Malaysia gets more than 3.5 million visitors per
year, and Cambodia gets over 8 million. These destinations have surpassed Sri Lanka
despite offering only one-dimensional products: Langkawi has only beaches, and
Cambodia has just one attraction—Angkor Wat, which itself depicts the Ramayana, a
story that happened in Sri Lanka. We should be ashamed of how little we have achieved
over the last decade, given that Sri Lanka has more to offer as a tourism destination than
any of our competitors.
As I have mentioned before in this column, the lack of strategic planning for the Tourism
Industry is the key reason for this. As we close the year, I would like to go more in-depth
into my thinking on some inherent factors that contribute to the industry’s chronic
underperformance.

Sub-optimal strategic positioning

Since the end of the war, wishful and emotional thinking has dictated the industry’s trajectory
instead of benchmarked strategic analysis. The so-called Tourism Product Development (in
reality mainly a zoning exercise) carried around 2012 identified Passikudah, Kalpitiya, and
Kuchchavelli as promoted tourism zones in exactly the same way Bentota, Beruwela,
Negombo etc. had been promoted in the 1970s. However, we have had very different results. 

While “sun, sea, and sand” was the right product in the 1970s given lack of other regional
tourism products, it is not the case today. By assuming that what worked in the past would
work in the future too, the whole industry was pushed back. Investors turned away because
the biggest government sponsored projects were disasters.

It is exactly the same thing with so many destination campaigns that never yield dividends.
Not a single one. These campaigns were not developed by agencies in a vacuum but were
driven by the industry, drawing inputs from both the government and the private sector. 
Even the current campaign, while its intentions seem somewhat more sophisticated at least
inasmuch as it tries to cover the diverse product that Sri Lanka is, falls way short of what is
needed.

To start with “So Sri Lanka” can easily lead to satire as we have already seen (albeit factors
that the industry could not control) and that itself is enough to shelve the
campaign.  Moreover, while it tried to address the sub-products in Sri Lanka’ tourism
industry, it lacked a proper understanding of the varied market segments and sub-products
that would appeal to those segments. The campaign adopts a cookie cutter approach that
assumes that what works in UK will work in Germany or even China. This is not the case. 

China, for instance, represents one of the largest source countries of tourists, globally. It is
common management knowledge that you do not approach China as one market. The country
is generally approached on a provincial basis when it comes to marketing and positioning of
products there. What works in one province may not work in another. 

However, instead of recognizing that markets are segmented, and that tourism sub-products
need to be matched to the outbound tourism potential of these segments, we have one
campaign for the whole world. 

Another flaw in this process is that we have completely ignored the large potential of
emerging regional markets and still depend primarily on Europe (which is mostly seasonal),
China and India. Even within these markets, our primary focus is on attracting busloads of
package tourists—which is in the lower end of the market—rather than segments with
potentially higher yields. A proper strategic analysis of the tourism industry would prevent
such blinkered thinking. 

Take for instance a comparison between Thailand and Sri Lanka. Most of the products Sri
Lanka has to offer are similar to or better than Thailand—with sex tourism being the one
exception that Sri Lanka does not provide. The following chart demonstrates how many more
tourists from Sri Lanka’s top 10 source markets visit Thailand. 
This clearly shows how much more we can achieve within our own top ten markets. Also,
note, that Thailand is further away than Sri Lanka is, to nearly all these countries except for
Australia and China. Nevertheless, all these countries produce more than 500% in Thailand
compared to Sri Lanka. India, China and UK, our top three source markets, send
approximately 13 million more tourists to Thailand than they do to Sri Lanka. If only we
marketed our existing products better within our current top markets, we can significantly
grow the industry. 

Now look at Thailand’s top 10 source markets, and compare the numbers that go there vis-à-
vis Sri Lanka:

 Analyzing Thailand’s top markets is as important, given we both have similar core products
except for sex tourism. What is very clear is we are missing out on many of the burgeoning
Asian markets from which tourists visit Thailand in high numbers. 

Four of the top markets for Thailand are not even within our top ten. Malaysia, Korea, Japan
and Singapore collectively sent 7.6 Million tourists to Thailand in 2017. Sri Lanka received
less than 100,000 tourists from these four countries in the same year. (Laos is ignored in this
analysis as Laotians mostly travel for trade and are not tourists per se). This clearly shows
that our tourism product has an appeal in more markets than what we are currently serving.

In both cases, what is evident is we lack a proper understanding of our markets, product, and
competition. This is the essence of strategy, and we just can’t expect any progress as long as
this status quo prevails.  
To sum up, Sri Lanka is easily a 10 – 15 Million tourist destination, but it needs to compete
in multiple segments with promotion of different products in different locations. We need a
comprehensive benchmarked and fact based strategic plan that addresses all the above and
plan for 15 Million arrivals. We can easily get to that level in 10 years. This will ensure the
sustainability of the whole product and equitable distribution of the returns throughout the
country and society. 

With the accolades given by the Leading global travel indicators and various travel
magazines, including Lonely Planet and National Geographic Traveler etc, Sri Lanka has
been recognized as the Best Destination or One of the Best Tourist Destinations in the
world.
Tourist attractions in Sri Lanka have been fascinated in “So Much in So Little”,
including UNESCO heritage sites, sandy beaches, attractive wildlife parks and hill
country sceneries, as an island of its size - undoubtedly one of the best tourist destinations
in the world of its entire size. The astonishing wildlife attractions (such as the world’s
highest elephant gathering at Minneriya national park), thousand-year old Buddhist
monuments representing one of the highest numbers of the UNESCO World Heritages in
the region, hiking, train travels through the Hill Country’s tea plantations, Enjoyable
tropical glamorous beaches including Sun bathing, Surfing, Corel watching, Diving,
preserved unique Sri Lankan identity, Colonial Heritance and Legacies, Authentic Sri
Lankan Cuisine and much more provide tourists with “Unforgettable Travel Experiences”
alone with the mesmeric socio-cultural diversity and warm friendliness of people of Sri
Lanka.

Travel & Tourism Competitiveness index (TTCI) and “So Sri Lanka”
Increasing the Travel & Tourism Competitiveness (TTC) over the other destinations
has been considered as a fundamental strategy to increase the attractiveness of a country -
Higher the competitiveness of a tourist destination is, the Greater attractiveness of
tourists to such destination.
Consequently, the industry could generate higher tourism receipts, employment
opportunities and other possible positive socio-economic impact to the economic growth
and development of the country. The Global Travel and Tourism Competitiveness Index
(TTCI) provides a set of factors and policies which empower the sustainable development
of the Travel and tourism sector, which consequently lead for the development and
competitiveness of tourism industry of a country.
The Travel and Tourism Competitiveness Index (TTCI) measures the tourism
competitiveness among 140 countries of the world considering of 4 Sub-Indexes, 14
Pillars and 90 Individual Indicators distributed among these 14 Pillars, analyzes the
factors that enable the sustainable development of both travel and tourism, in term of
contributing to higher standards of tourism development of a country. The TTCI
considers Four (4) Main Components: (1) Enabling Environment, (2) Travel Tourism
Policy and Enabling Conditions (3) Infrastructures and (4) Natural and Cultural
Resources. The TTCI highlights the strong and weak areas of the destination country in
order to enhance the competitiveness of tourism industry.
Sri Lanka in the Asia-Pacific Travel and Tourism Competitiveness Index-2019

Country Global Rank Score

Japan 4 5.4
Australia 7 5.1
China 13 4.9
Hong Kong 14 4.8
Korea .Rep 16 4.8
Singapore 17 4.8
New Zealand 18 4.7
Malaysia 29 4.5
Thailand 31 4.5
India 34 4.4
Taiwan 37 4.3
Indonesia 40 4.3
Vietnam 63 3.9
Brunei 72 3.8
Philippines 75 3.8
Sri Lanka 77 3.7
Mongolia 93 3.5
Lao 97 3.4
Cambodia 98 3.4
 Nepal 102 3.3
Bangladesh 120 3.1
Pakistan 121 3.1
Source: Compiled from http://www3.weforum.org/docs/WEF_TTCR_2019.pdf /.
In regional wise, Asia-Pacific is the second most competitive region only behind the Europe and
Eurasia. In the Asia – Pacific region, several countries like Japan, Australia, China, Singapore,
Malaysia, New Zealand, Thailand, India have been able to show their high competitiveness
rather than most of the destination countries in the region. Previous year, Sri Lanka was ranked
as the 77th out of 140 countries by . The rank was reduced by 13 ranking positions from the last
survey in 2017 (64th place in 2017).

6. Company’s efforts towards branding products/services from Sri Lanka?

References

 Global strategies in the international hotel industry. Whitla, P. Peeter, G.P.

Davies, H. International Journal of Hospitality Management. Volume 26 (2007)
Pg. 777-792.


About
Seasoned executive, Entreprenure and group Managing Director with almost twenty years of
strategy, business development, corporate finance, accounting, management and start up
experience
 More than fifteen years of international experiance including USA, Sri Lanka India,
Malaysia, Singapore, and Thailand

Founded and grew MAK Alliance group to 6 companies and 40 employees representing
hospitality, health and wellness, rigid and flexible packaging, and international trading within
the first year with offices in Sri Lanka, Dubai, and Singapore

Managed and completed 2 M&A deals to acquire two manufacturing companies in Sri Lanka
in the plastics and packaging sector and turned them around with operating profits within the
first 6 months

Founded Santani, Sri Lanka's first integrated wellness resort with 50 rooms and full
destination spa facilities on a 48 acre estate
Articles by Vickum


SO Under Performing, SO Sri Lanka.

By Vickum Nawagamuwage
December 24, 2018
Activity

 Space to breath, space to fall in love, space to selfceare, space to forget the
stresses of last year....whats more, it comes with G&T or your…
Shared by Vickum Nawagamuwage
Experience


Advisory Committee Member - Minister of Tourism, Sri Lanka
Government of Sri Lanka
Oct 2020 - Present6 months
Sri Lanka
Committee Member advising the Minister of Tourism in Sri Lanka. Special focus on wellness
and high end tourism.


Founder and CEO, Santani Resort and Spa
Santani Resort and Spa
2014 - Present7 years
Founded and led Santani to be one of the worlds best new hotel brands in just two years.
Santani is widely acclaimed as the best new hotel in the world with TIME magazine selecting
it to the inaugural 100 Greatest Places of the World.


Managing Director and CEO
MAK Alliance Group
Jan 2012 - Present9 years 3 months
Sri Lanka
MAK Alliance is a boutique advisory and private investment management firm based in
Colombo, Sri Lanka with offices in Singapore and Dubai. MAK Alliance strives to provide
customized solutions in investment management and strategic advisory with a special focus
on Sri Lanka. We work with regional PE and other fund managers and HNI in managing
investments in Sri Lanka and other regional markets. MAK Alliance has currently invested in
Hospitality, Health and Wellness, Rigid and Flexible…
Show more 

SO Under Performing, SO Sri Lanka.

Published on December 24, 2018
 Vickum NawagamuwageFollow
Founder and CEO Santani Wellness Resort and Spa
 Like35
 Comment10

 Share

Sunday Times edited out some of the essence of the article, examples of a benchmarked
analysis. So here is the full article.

As Sri Lanka ends the year reeling from the most shameful political fiasco in its postcolonial
history, we have shown yet again that we are much more capable of harming ourselves than
any external force our politicians constantly blame. Unfortunately, this is the same with the
tourism industry.  While the whole world is trying to promote Sri Lanka as one of the world’s
top destinations—from New York Times in 2011 to Lonely Planet this year—the country
remains a 2 million arrivals destination nearly 10 years after the end of the war. 

In contrast, Langkawi, a tiny island off Malaysia gets more than 3.5 million visitors per year,
and Cambodia gets over 8 million. These destinations have surpassed Sri Lanka despite
offering only one-dimensional products: Langkawi has only beaches, and Cambodia has just
one attraction—Angkor Wat, which itself depicts the Ramayana, a story that happened in Sri
Lanka. We should be ashamed of how little we have achieved over the last decade, given that
Sri Lanka has more to offer as a tourism destination than any of our competitors. 

As I have mentioned before in this column, the lack of strategic planning for the Tourism
Industry is the key reason for this. As we close the year, I would like to go more in-depth into
my thinking on some inherent factors that contribute to the industry’s chronic
underperformance. 

Living in the past with an entitlement mentality

Our industry had a sudden end in 1983, at a time when we were on par with Thailand as an
Asian destination. At that point, Maldives, Bali, Langkawi, etc., were not major players, and
Sri Lanka and Thailand were the top 2 destinations in this region. 

Then for 27 years, we did not grow as an industry for obvious reasons that were beyond the
industry’s control. When the war ended, and Tourism was again brought to the forefront, the
industry was not prepared. It defaulted to what we left behind in 1983 with similar concepts,
mostly driven by the same people. 

We did not take a step back and take stock of the regional industry. We did not understand
that the competitive landscape had changed considerably since 1983. That there were so
many alternative and high-end destinations providing similar Tourism products was virtually
ignored. 

Apart from a few exceptions, the industry seemed to believe that the whole world was
waiting to descend on Sri Lanka en masse, and that all we needed to do was build more beach
hotels.

Human Capital Gap

A major reason for this sort of blinkered thinking was that there was no proper development
of the industry’s human capital during the war. During that time, for the most part, tourism
was the last option for employment because the industry was on a shoestring budget. The best
brains stayed away. 

As a result, it was mostly the leaders from the pre-war era who came to the fore to create the
future of Sri Lankan Tourism at the end of the war. While their intentions were no doubt
excellent, the issue was that they were mostly an antiquated lot with outdated skills and
experience, given the industry needs and the competition around us. 

Unfortunately even today, most industry leaders in both the Government and the private
sector are mostly such people. If the industry is to succeed, the veterans need to go. It is not
anyone’s fault, but the need of the hour. 

The Tourism Industry needs to become dynamic to attract the best. The sooner we get the top
brains (instead of focusing on experience) the sooner Tourism will become the industry we
hope it can be. 

With proper strategy and foresight, this can be achieved. Sri Lanka has done it before. Just
look at how the apparel industry transformed from being much maligned to being one of the
most glamorous industries in the country. One that was, until very recently, the first choice
for employment amongst the country’s best brains. 

The Tourism Industry needs this sort of far reaching internal transformation. And it needs it
fast. 

Lacking faith in itself

One critical factor impeding this sort of transformation is the almost colonial mindset within
the industry. An unfortunate saying amongst some in the industry is that “we need white
skin”. Again, this stems from our lack of strong and smart leaders. 

There is no gainsaying we need expertise and exposure and for that we certainly need
expatriate staff working in the industry, whatever their skin color. This will also help fill the
human capital gap. However, this needs to be done in a strategic way, hand in hand with an
overall human capital improvement plan that develops local talent. 

Unfortunately, instead of taking steps towards this, we keep flogging the same dying horses
again and again. Take for instance tourism promotion. 
When it comes to marketing Sri Lanka, we are almost solely dependent on very young
Europeans, who visit on a “Familiarization Trip” to experience Sri Lanka for a week to 10
days. It is these “Sri Lanka Specialists” who then take the lead in promoting the country
within their markets. 

It is really sad that Sri Lankans who have grown up in Sri Lanka all their lives, who have
studied about its attractions and it history since the age of 5 or 6 and have visited these places
many times, don’t have much of a say in this process. 

If we can’t market Sri Lanka ourselves, we are doomed. 

Sri Lankans need to lead the selling of Sri Lanka, not “Sri Lanka Specialists” based in foreign
countries, who may have visited Sri Lanka only once or twice. Such cursory explorations of
the country and its offerings significantly limit Sri Lanka from achieving its tourism
potential. 

Wishful thinking won’t make it happen. 

Published By

Vickum Nawagamuwage
Founder and CEO Santani Wellness Resort and Spa
Follow
#Srilanka #SLtourism #strategy
10 comments

Sign in to leave your comment

Indika Dissanayake
Credit Officer Sampath Bank
Very interesting thoughts.
Like
Reply
1y

Benjamin Pereira
Founder at The Heritage Collection, Sri Lanka
Great analysis of the local tourism industry as we have experienced since 2002
ourselves. Time to make and see the change.
Like
Reply
1y

LinkedIn User
Absolutely agree with you Vickum Sri Lanka can position itself like Singapore for
both trade and tourism
Like
Reply
1 Like
2y

Jessy Thorand
Hotel management all rounder - reopening - preopening - available worlwide
Accurate, solution often comes with setting the right task force, Portugal was a good
exemple, lately the tiny Ras Al Khaima did the right moves, set a roadmap and
started lobbying intelligently as well while enjoying a fraction of Sri Lanka culture and
history https://www.thebusinessyear.com/ras-al-khaimah/haitham-mattar-ceo-ras-al-
khaimah-tourism-development-authority/vip-interview https://en.raktda.com/news-
and-media/press-releases/2018/12/18/ras-al-khaimah-tourism-development-
authority-unveils-the-emirate-s-new-destination-strategy-2019-2021-a3907
Like
Reply
2 Likes
2y

Essay

Introduction to the Hospitality Industry

The hospitality industry composed with service oriented industries which included industries in vast
range of fields like Tourism, Hotels, Restaurants, Lodges, Leisure Parks, Transports, Medical Hospitals
& Services, Advisory Services, etc..
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It consists with low profitability an industry to Highest Profitability industries which are broadly
distributed among the world and also this profitability is greatly fluctuates than manufacturing
industries due to the several reasons. These each and every Hospitality firm consists of several
working groups such as Front Office, Back Office, Maintenance Unit; Operations Unit, Human
Resources, Marketing, Promotion and Advertising, etc (David, and Chon, 2006).

Depend on the type of service they offer, this hospitality industries covers a broad range of
organizations. They can further divided into sub categories depend on the Skills and qualifications
their workers have to cater their customers with the set of services they have.

E.g; Cooking, Nursing, Entertaining, Advising, etc

They are in position to cater the needs of customers better than the competition is more likely able
to sustain competitive advantage over time. Catering to customer needs is dominant to delivering
desirable levels of customer satisfaction in the tourism industry. The formula for executing this task
is particularly fragile in tourism because of the heterogeneous and simultaneous nature of service
production and consumption.

Tourism experiences are rarely, if ever, delivered without in-depth employee-customer interactions.
Thus, tourism experiences are people-intensive on both sides of the service fence. Additionally,
tourists tend to have higher expectations for hospitality and overall levels of service quality because
their context is typically more emotionally charged. An empowered workforce is a secret to success
in these unique area employees who are inspired and enabled to make meaningful and suitable
decisions close to customers in order to take care of important customer needs

Internationalization is described as the expanding of activities and resources among the other
countries of the world, beyond domestic level. However, in the internationalization the firm should
be more effective and efficient enough to cater the customers in the world over domestic level.
Although starts at that level, when a firm becomes a larger, they can generates more profit and thus
with their efficiency, they can reached far and wide variety of consumers while making the market
more attractive. It leads to broaden the market continuous way in the world (David, and Chon,
2006).

Strategies of internationalization in hospitality industry

There are several strategies of internationalization to gain more customer satisfaction n with
effectively and efficiently.
The development of computer technology, communication technology, and new means of
transportation all leads to develop the internationalization. Today, internationalization has turn into
one of the major concern of firms As barriers to international trade fall down in most of the parts of
the world, managers happen to attentive in new trends in an fluctuating global environment
(Macleod, 2004).

For example, the Euro currency is ahead a chief position within the European market and it forced to
the Eastern European markets to develop rapidly to face this competition, it effects to the Asian
markets too. They are opening to the world.

International firms change their strategies from one geographical region to another, to sustain in the
competitive business environment.

Eg: One of express delivery service in the world, Federal Express (FedEx) dominates the market in
the American Region, but in the other markets like European Region, FedEx was not successful. That
market dominated by DHL.

Hotel franchising agreements is a legal document in which a franchiser offers an approved

opportunity to a franchisee to carry out their business. This is permission to franchisee use brand
name, reservation systems, products, operating systems. Franchising strategy is used by Hilton
International as a part of its international strategy decision (Shepherd, and Cooper, 1997).

Management contracts means in which management is separated from their ownership, where a
company can contract its overseas operation of management to a management team in revisit for a
payment

For an example: Sodehxo is one of the companies which use management contract in the industry.

Strategic alliances means in which a bond or a partnership or a connection forms between two or
more companies that can support from larger market exposure, economies of scope or range
enlarged visibility for the brand name . The best example is the strategic alliance between Nortel and
Microsoft Company.

Joint venture means in which the international firm provides a partial equity venture to home
businesses to protect their promise to the agreement. Accor is actively involved in joint ventures in
different Asian markets such as Malaysia and Vietnam
Call Center Service Recovery means Telephone based customer service is the largest customer
services’ channel in both North America, and Europe (The Editors 2007). Call centers’ customer
service volume is higher than electronic mail support service. Despite this lack of acknowledgement
from call centers, there is a gap between the service provided and customer expectations.

The Green strategy means industry perceptions and perspectives as a new market -driven business
focus for gaining competitive advantages. All businesses no matter how benign or smart their
operations are create some level of environmental harm. These impacts can be minimized or
controlled by a adopting a well-articulated firm-level green strategy. This require to green should not
just be to address companywide environmental challenge but also a proactive strategy to stay on the
right side of the regulation and for profitability (Kotler, Bowen, and Makens, 2003).

Issues and impacts of internationalization on hospitality industry

Issues and impacts bring together the latest developments in international hospitality operations
with the current management principles. It provides a truly international viewpoint on the
hospitality and tourism industries and provides a fresh insight into hospitality and tourism
management.

Internationalization is a major trend for today’s organizations. The services sector is also
unquestionably becoming increasingly international in scope. A rapid Internationalization of world
economy during the 1990s has increased the opportunities to export services and services are now
the fastest growing part of international trade. Speed up by their aspiration for growth and profit,
host governments provide incentives, and invest throughout the world. Hospitality organizations
have revealed that their survival and growth in the future depend on extending of their services
around the world (Hearns, Baum, and Devine, 2009).

The global hospitality industry is therefore one of major part of international business. Those
companies therefore have to look up the inferences of the global framework in which they operate
and always need to prepare for the changes of this highly fluctuating environment.

The Internationalization of industry and its way is characterized by communicating over vast
distances in foreign languages, normally travel to overseas countries, trading in many currencies,
and coping with social systems, series of political and, cultures and customs. And regulatory
environments, the aspects of Internationalization of are very easy to identify, considerate the basic
current and future trends and market can be analysis and reveals a number of issues are reshaping
the Internationalization hospitality industry, though there are very clearly some multifaceted
questions that are still to be resolved (Mason, 2008).

International spreading out with general product and brand position;

Organizational structures that tolerate delivery of services with local operational control;

Cross-border employee training to support operations; and

Use of the world capital markets as sources of funding.

The Positive Impacts of Internationalization on the hospitality industry;

Exposure to different cultures: Due to the internationalization of the managers of hospitality

industry, they would be able to gain knowledge of different cultures, as they get to fuse with people
from different walks of life and thus, enhance their awareness.

Larger Market: Due to internationalization, the customer base has enlarged significantly. Not only for
holydays, people travel all over the world for various purposes like business, Pilgrims, Education,
health, etc. Thus, this has widened the market of hospitality industry, which gets their major income
from these international visitors.

Boosts the economy: As visitors come in and spend money it effects to the foreign exchange of the
country and it gets increase. Thus it gives huge boost to the economy as internationalization leads to
pump money into the country.

Technology Development: Since firm needs to attract more tourists as possible, hospitality
organizations always need to improve and develop their products and services.

Example: Fly Kingfisher, use innovative and newer technologies in hotels to satisfy their customer
needs.

Allow to creativity: Firms are continuously thinking of new and innovative ideas to draw more
customers.

More Jobs: Due to internationalization, more visitors come into the country and thus more people
will be required to serve their needs. Therefore, with the internationalization, there are lots of more
jobs opportunities for people within the areas which hospitality industries are located.

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Our academic experts are ready and waiting to assist with any writing project you may have. From
simple essay plans, through to full dissertations, you can guarantee we have a service perfectly
matched to your needs.

Variety of International Services: Since there are lot of diverse visitors from various cultures,
cuisines, traditions, and languages, hospitality industry should include cuisines and various other
services to cater them. These services also will be available to the

locals, which makes more satisfied local customers.

Boosts the Travel Industry: Due to internationalization more people travel around the countries. To
facilitate this, the tours and travels industry require to develop as well.

People who come into the country by air, ship or land, will use the transport services obtainable as
well.

The negative impacts of internationalization on the hospitality industry;

Language Barriers: Due to internationalization, the hospitality Industry can make use of people from
different type of countries as they are usually cheaper. They may have troubles in communicating
with customers.

Events/Disasters in the Countries: A disaster or incident taking place in one country may affect to the
other country also.

For example, the financial crisis makes people to spend less money. It drops down the travelling,
Hotel bookings, etc.

Due to increase in terrorism activities some visitors are not willing to travel to those places.

Cultural Barriers: As there are people from a mixture of cultures, one needs to be watchful not to
insult them.

For Example, a Muslim not eats pork. Service provider have to make sure not serve food with pork.
What’s acceptable by one culture may be reject by another.
Seasonal Employment: During climax periods, a lot of jobs are available in some industries, but as
soon as the customers return to their countries, the jobs get vanished as well.

Example: Goa of India; the people in Goa get their revenue only during the climax season, (Dec- Feb
and April – July) In other seasons, they have no jobs and no earnings.

Growth of the Communication Technology: Due to international barriers, there is a constant growth
in the use of communication technology (Internet, Email, etc). This

reduces the human involvement.

Developing Countries: As technology continuously gets developing, some Countries are unable to
keep up with these developments in the technology and they tend to lose out. Example: Though the
some African countries have lot of natural resources for the attraction of tourists, they do not have
proper infrastructure to cater that large amount of tourists. To maintain that large amount of
visitors, they should have to improve

infrastructure.

Increase in Crimes: When tourist arrival increases, crimes increase too.

Example: smuggling, hustling, rape, etc

Bad Habits: Tourists come from other countries sometimes may influence to the local youth in a bad
manner. Increase of drug consumption and promiscuous behavior, etc

(Source: Market of sustainable tourism, [online],

Available from: http://towards2015.co.uk [Accessed 12th April 2011])

Integration of the hospitality industry

To offer a better customer service and keep loyal client come back today’s hospitality industry
require integration system. Thereby they can maintain their controls and improve their business. To
have a smooth running integration system can aid organizations with a sustainable competitive
advantage by improving quality of the service while reducing cost.

Superior performance and sustainable product with good quality can help a company to reduce the
threat of conflicts/problems with their Suppliers, Staff, Local People, and Government and improve
its position as an esteemed partner in destination. That mean, better access to major business
resources such as funds, the capability to improve products to meet rising market demand, better
dealings with governments, and a motivated and faithful staff.

Egg: The computer software is a combination of various modules, which cater to the various aspects
of hotel management. It including with hotel staff management, hotel reservation and hotel
accounting are taken care of by the different modules in a single software unit. Many software
companies have gathered more areas of hotel management into their software. All the operations
like bookings, billings, reservations, check-ins, checkouts and etc, are available on screen and can do
within few clicks of mouse. Therefore, taken as a whole, efficiency of the hotel staff and the
management system is increased. Clients can reserve the rooms and other services through the
hotel website directly. There is no room for any third party connection in these events (Kneafsey,
1998).

However, there are some advantages in this integration as follows;

It helps to reduce the cost of transportation as the general ownership outcome in closer geographic
regions.

The costs for transactions can be managed if a firm gets hold of the other firms in the vertical chain,
so the one division of the company can transfer the goods to the other divisions of the same
company. Thereby, transaction costs for transport, negotiations; Monitoring, control & etc. will be
eliminated. The by and large, average cost of the firm will be reduced, because if the divisions are in
under the same management, then there will be internal supply and department heads will decide
the transfer price (Macleod, 2004).

If a firm purchases half finished goods from an outside firm then the work culture could be different
and there are opportunities of dispute concerning terms and conditions of supplying or if the outside
supplier make a contract and couldn’t supply the goods on time then the firm cannot accomplish its
assurance to the third party and the good will of a firm will come to an end. Organizational
inferences; if the supplies provider supplying the goods to a firm is big, in terms of sales, size and
structure, then it will state the terms and conditions. On the other hand if an internal source is used
then there will be no market difference and the supplier cannot oblige any adverse conditions
(Haywood, and Maki, 1992)
We can split the benefits of integration into short-term or static gains and more long-term dynamic
gains.

The establishment of the Single market within Europe has led to significant gains for the
participating member states. The removal of internal market barriers and the harmonization of
national regulations are expected to lead to an increase in trade and reductions in cost.

Conclusion

Hospitality and tourism industry plays a key role in international competitive business environment.
On one hand, it goes for lot of fluctuations due to different types of global factors. Although, it has
been sustained over long period of time by facing to those factors, the two main parts of Hospitality
and Tourism Industry combined with is Internationalization and integration. They lead to the growth,
sustainability and profitability of the Hospitality Industry and their impacts will be directly involved
to the evolutionary change of this Industry.