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Globalization and Its Impact on Tourism and Hospitality Industry

Title: Globalization and its impact on Tourism and Hospitality industry.

Globalization is a powerful process of integration in international relations between people, companies, and governments. This process is promoted by international trade and investment and supported by travel technology (The Levin Institute – The State University of New York, 2017). This essay discusses the causes and effects of globalization on the tourism and hospitality industry. The essay will concludes that globalization has positive impacts on the tourism and hospitality industry through the development of transportation and technology.

Modern and efficient transportation not only substantially supports companies worldwide with exchange of goods and services to customers within days, but also for the enhancement of the tourism industry which contributes to the economy of a nation. Transportation in tourism is most often seen as just part of the tourism system which is the main means to carry passengers to the destinations, a means of commuting from one destination to another. Nowadays, there are a range of different types of transport such as roadways, railways, waterways and airways. Commuters will prefer to choose a transportation based on their purpose for travelling, cost and length of the journey. Therefore, the upgrading and modernization of the transport system during the globalization period has truly satisfy travel needs of community. For instance, as Chew (1987) claimed innovations in long-haul air transportation was completed soon for demand of international tourism in previously unreachable destinations.

Transportation system of a tourist destination has an impact on the tourism experience which explains how people travel and why they choose different forms of holiday, destination, and transport. The rapid development of transportation has brought great benefits to the tourism industry due to globalization. Therefore, transportation advancements are opening more access to the world for more people and creating easier and more affordable ways to travel. According to statistics provided by World Tourism Organization (WTO), international tourist arrivals increased by 7 % in 2017 to 1,323 million. In 2017, international tourism created US$ 1.6 trillion in export profits. The need for transport is greater and the quality requirements is becoming more demanding. With globalization, by improving distance-travel modern and efficient, travel speed, travel time and comfort, new modes of transportation have revolutionized the tourism industry. Aircraft such as the Boeing 787 Dreamliner have opened new routes by creating an aircraft capable of flying “long haul” distances with a larger passenger load. Moreover, security at most airports has been increased in an effort to protect people and planes on the international network. As a result, with all the advantages of transportation in globalization, it has boosted the travel needs of customers, bringing sustainable development to the international tourism industry.

Globalization of the world economy promotes the rapid development of technology. As other industrial sectors, hospitality is also affected by global technology trends. The role of technology in hospitality industry has high importance in managing employee efficiency, customer satisfaction and generate revenue. In today’s era, technology is the core value for any organisation which will decide the success or failure of any organization in the long term. In the hotel business, high-tech hotel equipment has been grouped into two categories: systems to maximize profits and systems to maximize guest service. Some of the major technologies that transformed the hotel business include: online booking, Wi-Fi, RFID (Radio-frequency identification device). The top hotels today focus on upgrading these facilities to enhance customer satisfaction, creating a solid reputation for the brand of the hotel.

The impact of technology has played an important role in the development of the hospitality industry. The level of technology and technological capabilities in hospitality system to assess the advantages or disadvantages the hotel may face. Service providers (hotels, restaurants) can control the customer data and manage customer to make the strategy of attracting customers through incentives. For customers, the most important thing is to compare prices, make reservations of rooms, review guest experiences and using high technology. People use modern devices such as smartphones instead of traditional devices to booking, reading review for the best hotel chosen. Moreover, with one of the fastest growing tools today is social media will assists customers in creating memorable experiences in hotel (posting pictures, update emotion) and also indirectly promotes the services and hotel brands, creating a good review advertisement for the hotel. Therefore, hospitality businesses can easily through social media forge deeper relationships online with its potential customers. As Sloan, Legrand and Chen (2013) claimed, modernizing technology has highly benefited firms to lower its cost of operations in hospitality. The viewpoint of Enz (2009) that technology upgrades generate high cost for hotel organization, but at the same time, it offers multiple benefits to the company. Standing out from the competition, fulfill every guest’s expectation and attract new customers is the desire of any hotel operators. Thus, investing in internet of technology and innovations will be the best way for hotel businesses to achieve satisfactory results.

In conclusion, modern transportation and technology in globalization have significant impacts on tourism industry and hospitality industry. Tourism expands more when there are better transportation systems and it promotes the prosperity of the global tourism industry and connects tourist with various tourist attractions closely. On the other hand, using modern technology in the hospitality industry has helped the relationship between customers and hotel companies becomes more friendly and more professional. Global trends and challenges are changing the tourism and hotel business, it brings great benefits to the economy in general and tourism and hospitality industry in particular.


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