This is solution of Icon college contemporary issues in travel and tourism Assignment given in Icon College of Technology and Management for the course of HND Travel and Tourism.
This assignment will consider ‘Brazil Nuts’ as the selected organisation for analysis of Brazilian tourism sector analysis.
Current issues in Brazil and causes
Tourism is an important industry in itself .Today tourism has become a vital source of revenue. Tourism accounts for more than 30% of world’s total trade and services, and contributes 6% of overall exports of goods and services (Ghimire, 2013). Various developing countries such as India, Egypt, and Brazil etc. maintain their focus on travel and tourism sector since tourism plays a critical role in growth of economy and overall Gross Development Product (GDP).
Among various tourism destination, Brazil is one of the most popular tourism destination in world today. Tourism has played a critical role in development of various regions in the country of Brazil. Popularity of Brazil as a tourism destination can be assessed by the fact that in 2012 approximately 5.8 million tourists visited the country. Two major issues faced are:
Violence: Violence is one major issue and deterrent especially for foreign visitors visiting the country. Incidents such as rapes, robbery, and murder committed across popular tourist destination has shown a gradual increase over past few years. Regularly there are news related to some or the other type of assault on the visiting tourists. Petty incidents such as mugging, pick pocketing, bag snatching are reported in high numbers in popular cities such as Rio de Janerio and Sao Paulo. One major reason behind such rampant crime activities is the fact that major chunk of Brazilian population suffers from poverty forcing them to commit such crimes at various level. Although government agencies and police department has been trying their level best to eradicate this issue of violence, however Brazil as a long way to go before it can be termed as a safe country to visit (de Araujo et al, 2012:1138-1164).
Infrastructure issues and challenges: Although there are several issues being faced by Brazil tourism such as crime, violence, poor sanitation and cleanliness etc. but one of the major issues is the poor infrastructure in major tourism destinations across Brazil. Chaotic infrastructure and marketing planning has become a major challenge for Brazilian tourism. Poor roads, old airports with poor capacity of handling bigger aircrafts has created major bottleneck in tourism development of Brazil.
Extent to which the issues are driving the change in the destination
Apart from above two major issues, other challenges can be analysed through PEST analysis of Brazilian tourism:
Political: Political factor is one of the major reason behind inefficiency in the tourism sector. Frequent in-fighting within the ruling government has several times diverted the attention from the issues faced by the tourism sector.
Economic factors: Although Brazil tourism is today at third position in terms of tourism export it generates for Brazil. However amount of investment which it should receive back for its further development is relatively less. For example approximately 8% of nation’s GDP is allocated for tourism development. With increasing stress on tourism related infrastructure even this particular allotted amount appears less (Puppim, 2011:97-110).
Social Factor: social factor has played a major role in tourism of Brazil. A major portion of Brazilian society lives in poverty whereas another part lives in luxury. This has created a sort of imbalance in the Brazilian society that is why people living in poverty find it easy to commit petty crimes and get easy money from their victims.
Technology factor: Technology is major driving factor behind success of various tourism destination. With several travel booking portals coming up, it has become easy for Brazil to portray itself at a global level. However there are several domestic flights which still do not translate language on their website to English language. Major impact of this change will be that travellers coming of any other part of world can easily read the website and accordingly they can book their tickets.
Hence based on above analysis, one issue this which clearly stands out is the high violence. Due to high violence rate, various travellers cancel their ticket at last moment causing loss to the aviation sector as well. Overall it can be said that despite of rapid growth seen by Brazil as a tourism destination, there is a long way to go before Brazil can claim itself to be violence free country.
Emerging trends in terms of tourism product and service offerings such as attractions and accommodations in Brazil and how these trends influence change in terms of the type of visitors and their numbers.
Tourism sector has become a major industry in Brazil today. With FIFA World Cup’2014 round the corner, the tourism sector is witnessing tremendous push in terms of growth and development. Within Brazil there are various tourism attraction as such, however Rio de Janerio and Sao Paulo remains two of the most visited cities by foreign travellers. Although during 2006-2008 period there was a brief lull in the growth of the tourism sector mainly due to global economic recession, but since 2009 onwards, there has been significant progress and growth displayed by the sector. Today Brazil can be termed as the most visited country in the South-American continent. Although Brazil is famous for its beaches and casual tourism, but over a period of time two major trends have been observed in countries tourism sector. These trends have also forced tourism based business organisations to have a close look of it, and accordingly prepare their business environment strategy .
Outbound Tourism: As of now Brazil has been famous for its inbound tourism. Visitors particularly from North America, United Kingdom and Canada visit the country in huge numbers. But one important trend which has been shaping up since last 5 years is the increase in outbound tourism. Today Brazil has become sixth-largest source of foreign travellers for United States. This can be attributed to the fact that economic condition in Brazil is improving gradually. Also rise in middle class, and increase of purchasing power has also played a major role in increase of outbound tourism. This can be understood by the fact that, in a major travel and tourism based award function, United States was given top position when it came to the first country which a Brazilian would like to visit on his international trip. OTTI (Office of Travel and Tourism Industry) of United States has reported a huge increase (34%) in the number of arrivals from Brazil. This trend indicates, that as a country Brazil not only has displayed its capability of being a popular inbound tourism destination, but it also reflects that it has huge potential for outbound tourism. That is why there are various tourism based business organisations which are now coming up with various economical tour packages for Brazilian middle class. Various airlines have started from major cities of Brazil with flights to major tourist destination of United States. This is can be understood by the fact that Brazil currently has more than 10,000 travel agencies, out of which 65% of them issue international tickets.
Heritage cultural and Environmental Tourism: Brazil has been majorly considered a beach destination where visitors go to relax and enjoy. However based on reports of various travel and tourism agencies such as ABAV (The Brazilian Travel Agencies Association) there is sudden surge in visitors interested in experiencing heritage, cultural and environmental tourism of Brazil (Richards, 2007). There are various attractions in Brazil which qualify for this type of tourism such as:
- The Amazon Jungle
- Rainforests located in tropical and sub-tropical regions of Brazil
- Various unique animal species in Brazil
Hence above are the few of the attractions, which are attracting visitors who are focused on experiencing eco-tourism of Brazilian country (Wallace & Pierce, 2006: 843-873). That is why service providers, local people and various other tourism agencies are actively promoting the concept of eco-tourism in Brazil. Apart from its eco-tourism potential there is also huge demand for cultural and heritage tourism in Brazil. International visitors visiting Brazil want to explore Brazil beyond its white sand beaches and carnival. That is why various heritage sites which were declared as World Heritage Site by UNESCO today offer huge potential for cultural and heritage tourism. Many of these sites are:
- Ouro Preto which is a historic town and was declared as World Heritage Site in 1980.
- Sanctuary of Bom Jesus do Congonhas- Declared World Heritage Site in 1985
- Brasilia was declared as World Heritage Site in 1987
- Olinda which is a famous historic centre is also part of World Heritage Site declared by UNESCO in 1982.
Apart from declared heritage sites above, there are various other cultural centres which have proved to be a huge attraction for the tourists seeking heritage and cultural tourism. Tourism operators have also realised this potential, and that is why they have now customized tour packages for international tourists with specific focus on eco-tourism or cultural and heritage tourism. This trend is not only gaining popularity among inbound visitors, but even the local citizen of Brazil are travelling from one location to another to visit and experience these places (Ruschmann, 2012:125-128). With rise in awareness through various source of information there is surge in inbound tourism as well for the cultural and heritage tourism of Brazil.
How Brazil Nuts has responded to the emerging trends in terms of type of travel and tourism product demanded and the changing pattern of customer requirements.
There are several travel and tourism organisation which operate in and out of Brazil. BTOA also known as Brazil Tour Operators Association is one major group which comprises of various Brazilian and non-Brazilian travel and tourism organisations. It has various level of members such as:
- US tour operators
- Allied Members
- Associate Members
- Affiliate Members
- DMC Members
- Strategic Partners
Thus numerous travel and tourism organisations which specialize in Brazilian tourism are associated with the body. Considering example of US based tour operators, then these are the tour operators who are located in United States, with their specialty in Brazilian Tourism. In general visitors from United States use services of any of the members in this group since they get advantage in terms of volume thus reducing their holiday cost (Palhares, 2012).
One of the popular US based tour operator is ‘Brazil Nuts’. With more than 29 years of experience this particular organisation specializes in tourism for Brazil and all of the South America. Witnessing the rise in cultural, heritage and environmental based tourism Brazil Nuts has launched dedicated segments which fulfils demand of visitors who are willing to experience the cultural, heritage and eco-tourism of Brazil (Brazil Travel Packages, 2014).
For example Brazil Nuts has a dedicated section named as ‘Jungle Fever’ which is focused on concept of eco-tourism. Under which it offers packages such as:
- Three Eco-System of Brazil
- The Naturalist
- Amazon Getaway
- Birdwatcher’s Paradise
By marking its starting cost as US $ 2186, Brazil Nuts has ensured that the packages remain competitive in terms of their pricing.
Read more about Unit 12: Hospitality Provisions in TT sector
Similarly in order to cater demand for heritage tourism Brazil Nuts have come up with dedicated segment known as ‘Cultural Views’. Under this segment the organisation caters to those US visitors who are interested in experiencing cultural riches of Brazil including its rich cultural heritage. Thus various packages which it is offering under this segment are:
- Celebration of Life
- Jewels of Minas Gerais
- Baroque Treasures of the Estrada Real
- Highlights of Colonial Minas
- OURO PRETO, TIRADENTES
Hence based on above mentioned package one can clear understand that how Brazil Nuts has tried to cover various cultural and heritage tourism destination of Brazil. Recently the organisation also launched a dedicated marketing campaign which was focused on portraying the cultural and heritage tourism of Brazil. Since there is huge untapped potential in cultural and heritage tourism of Brazil, that is why tourism organisations such as Brazil Nuts in collaboration with government tourism authorities launched this initiatives. Such programs and campaigns are necessary for both the tourist destination as well as the tourism organisation. It helps the country to explore various destination which are relatively less popular than the main destinations.
Brazil Nuts through its aggressive marketing and promotional activities has been able to create significant interest among the potential US visitors interested in cultural and heritage tourism. It saw a rise of almost 20% in enquires which were focused on the cultural, heritage and eco-tourism related packages. This underlines the fact that gradually visitors are moving towards exploring various other aspects of Brazilian tourism rather than the typical image of ‘Sun-and Sand’ destination created over a period of time. In general it can be said that Brazil Nuts has been relatively successful in not creating awareness about the cultural and heritage tourism but also converting the potential enquires into customers buying various packages for the cultural and heritage tourism.
How effective were the responses and the impacts on the performance of Brazil Nuts
In travel and tourism sector reading the change in trend is an important skill which any tourism organisation must have to succeed. Considering the amount of competition which the segment has witnessed over past few year, any slackness in understanding the change and accordingly responding to it will result into failure of the organisation. That is why every year there are several tourism and travel organisation which are launched with lots of fun and fanfare but are eventually shut due to lack of business. Ironically they close operation citing lack of business despite of the fact that tourism sector is growing significantly (Vieira & Iaquinto, 2014:26-28). Similar is the story of Brazil tourism and Brazil Nuts which has based its entire business environment model on Brazil and South American Tourism.
Brazil Nuts as an organisation has always been proactive in understanding the fine changes in the tourism trends. That is why in its operations of 29 years it has reinvented itself as an organisation every 5-6 years based on the changing trend. That is why frequently it keeps on launching some or the other tourism categories in which a customer might be interested. For example it launched dedicated package for adventure tourism, when it realised that there is gradual increase in demand for adventure tourism in Brazil. Although adventure tourism currently cannot be considered as one of the core area of Brazil tourism, but with increase in demand over a period of time has indicated, that over next few years adventure tourism will become one of the biggest money spinner in Brazilian Tourism. That is why for organisation such as Brazil Nuts, making a first move in the segment has immense business advantage as well as value for the organisation. This business marketing strategy of fine reading of changes in trends of Brazil tourism has resulted into huge benefits for Brazil Nuts as an organisation. Due to quick launch of various customized packages on various themes of Brazil tourism, it has always been easy for Brazil Nuts to attract new customers. Once it pioneers a specific package, then other tourism organisations can only imitate and further customize it. Also due to its huge experience of 29 years, Brazil Nuts as an organisation has in-depth knowledge of the segment today. It has focused on offering relatively cheaper packages compared to its various other competitors. Brazil Nuts has focused on taking advantage from the volume rather than the high pricing for generating profit and revenue for the business. Another important strategy adopted by the organisation is to stick with its core expertise. Brazil Nuts since its inception has remained focused on the Brazil and South America Tourism. It knew the potential in the tourism of Brazil that is why it maintained its focus on that segment only. Rather than diversification in any other travel and tourism business, it continued catering to Brazil tourism and kept on launching new and innovative tour packages. This has helped the organisation to remain focused on its strength and extract benefit from its core expertise. (See Here : Travel and Tourism Management )
Critical analysis of the consequences of firms failing to response to the changing needs
However there are various other organisations as well who attempted by failed due to lack of vision of future trends. For example there are various tourism organisation which are popular worldwide, however due to lack of understanding of Brazil tourism specifics, they failed. For example organisations such as Thomas Cook which is famous for its cruise holidays never made it gained much from its Brazil based holiday packages. Core reason behind the failure was that its expertise was in some other tourism service whereas it attempted to cater to visitors demand without understanding their actual requirement. That is why it has become essential for organisations to first conduct an in-depth market research before entering a potential market. In case of Brazil tourism, today it is already crowded with numbers of tourism organisations, hence in such situation it becomes important to cleverly device the strategy planning to sustain in the competitive market.
Based on above discussion, it can be clearly observed that travel and tourism of Brazil has tremendous potential to be exploited, but there is still plenty of steps required to be taken at various levels to push tourism and travel to a height which it deserves. In order to ensure that Brazil tourism sector maintains its momentum and growth, it is important for various entities such as tourism organisation, government authorities, and local citizens etc. to remove all the issues which are being faced by the sector. Challenges related to infrastructure, crime and other violence needs to be eradicated as soon as possible. If these issues and concerns are addressed within a specific time frame then no one can stop Brazil tourism sector to achieve new heights of success.