Transformation Of Tourism: Innovations In The World’s Busiest Airports

Abstract

The tourism sector plays a critical role in countries’ economic development. However, the tourism sector is rapidly transformed due to tourism consumers’ changing expectations driven by socioeconomic, technological, psychological, political and other factors. These natural transformations lead to innovations as a tool to increase the competitiveness of tourism companies. Airports are in the forefront of the tourism sector, and because of the global changes, the nature of airports has been transformed and competition in the airport industry is intensifying across the world. All the airport operators are trying to improve their facilities and services in order to increase the number of their passengers and to compete with other airports. Innovation types used in tourism and airports are product or service, process, management and organization, marketing, and institutional innovations. This study aims to compare the busiest airports (Atlanta and Beijing airports) in the world, and examine the similarities and differences of these airports which play an important role in tourism.

Keywords: Tourism transformationsinnovations in tourismairports innovationspassenger experience

Introduction

One of the most important and dynamic areas of the service sector is tourism. The total contribution of tourism to GDP was $7,170.3 billion (9.8% of GDP) in 2015, and is projected to increase by 4% to $10,986.5 billion (10.8% of GDP) by 2026, and the total contribution of tourism to the employment was 9,5%, including jobs (283,578,000) in the indirectly-related fields. By 2026, this contribution is expected to increase by 2.5% and create 370,204,000 jobs (11.0% of total) (Travel & Tourism Economic Impact, 2016). However, the tourism sector faces global competition, and is characterized by ongoing transformation, in which innovations have become crucial in creating and maintaining competitiveness. General tourism transformations reflect specific services such as airline and airport services. Although all the airports have almost the same airside and landside safe flight needs for the transportation of customers and cargo in order to comply with the national and international aviation regulations, with the changing tourism trends, airport services and facilities have been re-designed to become “commercial entities” in the past three decades. Airports compete for the aviation market, and they must adapt their services to the changing customer behaviours and trends. Airports need to innovate in order to achieve or sustain a competitive advantage.

In this study, the transformations in the tourism sector and the innovations in the airport business are examined. The aim of the study is to analyze the latest trends of tourism sector transformations and the innovative services/facilities in the airport business. In order to extract the latest tourism sector trends, the busiest airports were chosen as the sample of analysis.

Literature Review and Theoretical Framework

Tourism Trends

The tourism sector transforms as the high standards of living have changed people's attitudes to tourism, their travel choices, and the new alternative tourism activities (Chen & Tsai, 2007; Williams & Buswell, 2003; Sirakaya, Uysal, & Yoshioka, 2003). Tourist expectations are changing due to the socioeconomic, technological, psychological, and other related factors shaping the new demand for tourism. The profile and needs of tourists are changing due to their improving socio-economic level, thanks to better education opportunities. The improving socioeconomic status is not the only reason for the changing tourist profile. The technological changes, increasing transportation speed and opportunities, variety of tourist destinations, development of the internet technologies, individualism, working conditions and increasing numbers of tourists have changed the profile of the tourist and tourism choices. On the other hand, politics and diplomacy also have a huge impact on tourism. Tourism depends on the freedom of travel, both within and between the countries and continents. In the beginning of the20th century, the number of people traveling was low due to political or economic constraints. Many people were given freedom of travel after the collapse of the Soviet Union, the flexible policy of the Chinese government, and the border elimination in the European Union. On the other hand, terrorism, illegal immigration, epidemics and natural disasters are a major threat to tourism.

There are some other factors influencing the tourism trends such as:

  • Global growth,

  • Continued growth of China which is the biggest spender in travel abroad in 2017 (UNWTO Press Release, 2017) and one of the world’s largest aviation markets (IATA 20 Year Passenger Forecast, 2018).

  • Millions of millennial generation people (age: 16-35) and their expectations and attitudes which shape tourism and air transportation industry (Jordan, 2016)

  • Growing number of older travellers (Harteveldt, 2016)

  • The proportion of the Internet users. 71% of the young people aged 15-24 are using the Internet globally. This rate is higher than the proportion of total population using the Internet (48%) (ICT Facts and Figures, 2017)

All of these factors create new alternatives and new tourism trends. Currently, the main segments of the tourism market are: recreation/holidays tourism, cultural tourism, business tourism, education/study tourism, eco-tourism, spiritual tourism, sports and activity holidays tourism, medical tourism, SPA tourism, religious tourism, and visiting friends and relatives, etc. (Tovmasyan, 2016; De Arellano, 2007; Swarbrook & Horner, 2007; Torkildsen, 2012). In 2014, travel for leisure purposes constituted over half of the total number of international tourists’ arrival (53%). Approximately 14% of the international tourists are traveling for professional and business purposes, while 27% reported other travel reasons, e.g., visiting relatives and friends, traveling for religious reasons and pilgrimage, treatment, health and other purposes. 6% of the visitors did not indicate their destination (UNWTO Tourism Highlights, 2015).

One of the biggest trends in the global tourism market is cultural tourism, which ensures economic growth in the destination countries. Tourists have become much more active and interested in getting involved in new experiences, and they want to have a vacation experience that would change them, rather than just having the experience of entertainment (Richards, 2001; Salman, 2010). The recently emerging concepts of the "creative industry", the "creative class", and the "creative economy" have transformed cultural tourism into creative tourism (Florida, 2002). Creative tourism enables learning and engaging in practices that are part of the culture of the country or community being visited (Scramaglia & Lavarini, 2017). Creative tourism is viewed as a strategy to renew travel trends socially, culturally and physically, promote tourism's social and cultural characteristics, and as a contribution to the local economies (Chang et al., 2014). Many countries and tourist destinations want to develop a variety of forms of creative tourism, such as the USA, Australia, New Zealand, Rome and South Africa (Rogerson, 2006) Creative tourism is the opportunity for visitors to actively participate in the learning process, and develop their creative potential (Richards & Raymond, 2000). Richards (2008) argues that creative tourism is a new form of tourism that can make a significant contribution to differentiating and changing tourism experiences. Other authors (Richards & Wilson, 2006; Zeppel & Hall, 1992) assert that, compared to the traditional forms of cultural tourism, creative tourism satisfies the needs of tourists who want to have more fulfilling and longer-lasting experiences. Creative tourism experiences occur at the destination rather than borrowing landscapes, images and pleasures and keeping them for themselves. The author also notes that creative tourists seek inclusion, and genuine experiences that promote an active understanding of the specific features of the area's culture. Among the various variables, the three major factors influencing the intent of revising the visit are motivation, perceived value, and experience (Chen & Chen, 2010; Huang & Hsu, 2009; Petrick & Backman, 2002; Um, Chon, & Ro, 2006; Prebensen, Woo, Chen ,& Uysal, 2012; Yoon & Uysal, 2005; Tung & Ritchie, 2011). Another new trend, which has significant implications, is the change from ownership acquisition to usage and sharing culture. Customers are now more interested in sharing their experiences with others (Huang & Benyoucef, 2013; Bilgihan & Nejad, 2015). However, the list of trends is not exhaustive, and countries, states and cities compete to attract more tourists and income from tourism. This competition is driven by the fact that new trends are emerging because of the changing customers.

In order to compete for the client (tourist), the service sector and, in particular, the tourism sector is involved in the development of innovation, but in a rather specific way, taking into account the specific characteristics of the tourism sector (intolerance, interactivity, value system and diversity) (Gyurácz-Németh, Friedrich, & Clarke, 2013). The tourist services for consumers are delivered through aggregation and technology (Buhalis, 1998; Gyurácz-Németh et al., 2013). Tourism is at the forefront of the development of information and communication technologies and e-business (Decelle, 2006), as the use of new technologies facilitates the availability of tourism services to its customers by offering user-friendly services and effectively competing with other intermediaries and distribution channels. In the tourism literature, innovation is defined on the basis of five categories (Mei, Arcodia, & Ruhanen, 2010):

  • Product or service innovations: changes that are perceived by the user as new.

  • Process innovations: new or highly developed methods covering both production and delivery processes, aiming at increasing efficiency and productivity.

  • Management and Organizational Innovation: new or significantly improved internal collaboration practices that relate to the company's practice of organizing internal cooperation in relation to company business practices, the organization of workplaces or external relations.

  • Marketing innovations: new or highly developed marketing techniques, including branding.

  • Institutional innovation: a new or improved collaborative/organizational structure and legal framework that improves the field of tourism business.

Described tourism trends are directly influencing most of the companies which play a key role in the tourism sector, including airlines and airports.

Airport Industry Trends in the Context of the Tourism Sector

The transformations in the tourism sector are directly reflected on the aviation industry which is affected by external improvement and regulation changes such as deregulation, liberalisation, privatization, and the economic, political and social improvements. Changes in air transportation are related to international tourism, relations between countries, new passengers’ requests and new service concepts.

According to some recent estimates (ATAG, 2016), the total economic impact including direct, indirect, induced and tourism-catalytic of the global aviation industry reached USD 2.7 trillion and 3.5% of the world’s gross domestic product (GDP) in 2014. For this reason, aviation is an important mode of transport for tourism markets (Graham, Papatheodorou, & Forsyth, 2016), and the connectivity brought by the air transport positively affects tourism. The share of inbound tourists through transportation modes shows that, globally, 54% of the international inbound tourists arrive by air. Furthermore, the air transportation industry supports over 36 million jobs within the tourism sector (Aviation Benefits Report, 2017 and 62.7 million jobs globally (ATAG, 2016).

Initially, the airports were just transfer points for the airlines and the passengers. However, this perspective has changed today, with almost every civil airport nowadays serving as a commercial entity and playing a crucial role in the national economies.

With the emergence of the charter business model in the 1960s and the low-cost business model in the 1970s, the traditional business models have changed. (Efthymiou & Papatheodorou, 2018). The new airline business models as the focus of the strategic and organizational research (Adiloğlu, Küçükönal, & Yalçinkaya, 2014) have changed the airport management philosophy (Halpern, 2018). New airlines increased the air traffic and efficiency of the secondary and regional airports, and with their alliances, joint ventures, mergers or acquisition of airlines, allowed the airports to serve a wider range of destinations (Halpern, 2018). Those changes have also affected the hub airports. Just like the airlines, most airports have also begun to be privatized. According to the ACI Report (2016), 16,9% of the airports in the EU were under full private ownership, and 29,9% of the airports were under partly private ownership in 2016. Also, 27% of the airports in the Non-EU countries are under part or full private ownership. A key consequence of the airport commercialisation and privatization trend is increasing the non-aeronautical revenues (Graham, 2014). Airports offer a wide variety of services to increase non-aeronautical revenues, decrease the costs, and to meet different needs of different customers from different countries such as chaplaincy services, conference & exhibition services, airport self-check-in kiosks, self-service passport control, and self bag-drop services.

Innovations have become a key factor for success. Airports, as any other enterprises in the tourism sector, must compete in a changing environment, and use new innovations to succeed in staying competitive. Today, because of the changing tourism trends, airports not only focus on ensuring basic services from landside to airside, but try to enhance their customer experiences with innovative services and facilities. The passenger experience is crucial because (i) a positive passenger experience enhances passenger satisfaction, the potential of future visits, and an increase in reputation (Wattanacharoensil, Schuckert & Graham, 2016), (ii) airport experiences can increase an airport’s non-aeronautical revenue (Graham, 2014), and (iii) experience also influences the choice of airline and airport, which also influences the airline’s decision to choose an airport as a transfer hub (Parrella, 2013). In the rest of this study, the facilities/services of the busiest airports in the world are examined.

Research Method

Sample and Data Collection

The sample to be analysed and evaluated includes two busiest airports in the world according to total passenger traffic in 2017 (ACI, 2017). The data for this study were gathered from the secondary data such as airport websites, the publications, annual reports provided by airports, and the news.

Table 1 -
See Full Size >

One of our cases is Hartsfield-Jackson Atlanta International Airport (ATL) which is owned by the City of Atlanta, and was built in 1975. It is classified as a large hub by the Federal Aviation Administration. For the 20th consecutive year, ATL is the world’s busiest airport (Immediate Release, 2018). ATL contributes over $70 billion in annual economic impact to the state (ATL Annual Report, 2016).

On the other hand, Beijing Capital International Airport (PEK) known as "China's No.1 Gateway" was built in 1958. Its annual passenger number was 1.03 million in 1978, which surpassed 95 million in 2017, ranking second among the airports in the world (About PEK, 2018). In 2017, China had 32 airports with annual passenger traffic of over 10 million and the total passenger traffic through these 32 airports accounted for 81.0% of the total of all the airports in mainland China. Furthermore, the total passenger traffic of airports in Beijing, Shanghai and Guangzhou made up 24.3% of that of all the airports in mainland China (CAAC, 2018).

Analyses

A qualitative research design was chosen to analyse the services/facilities provided by the airports. The MAXQDA software was used for documenting and analysing the facilities of the airports. The programs allow users to examine different data such as text, image, sound and video and allow to create categories according to their qualities (Adiller, 2016). The secondary data such as information from airport websites, the publications, annual reports and the news concerning ATL and PEK were also analysed. All the services/facilities included on the websites of the airports were coded (About ATL, 2018; About PEK, 2018) (see Appendix 1- the list of the sources for data collection).

Findings

The analysis of the data indicates that the services/facilities of the two busiest airports are differentiated from each other. Even if ATL and PEK are in the top two, the advertisement of their services and/or facilities are not all the same (Figure 1 ).

Figure 1: Figure 01. The services/facilities of the busiest airports
Figure 01. The services/facilities of the
      busiest airports
See Full Size >
  • Information/Guidance

While both airports offer information desk and hotel information services, PEK also provides a service for finding cars in parking garages. In addition, there is a hotel information desk at PEK.

  • Airline/Airport Lounges

Both airports have airline/airport lounges so that their passengers can spend their time in those lounges, and eat or drink something while they are waiting for their next flight. In Atlanta airport, the passengers might have the chance to take a shower if they fly with the American Airlines, Delta, or the United Airlines. In Beijing Airport, there are also different lounges owned by Air China, but the services are not mentioned on the website. For this reason, they were not included in the analysis. In PEK, there are also lounges like the First/Business Class Lounge which might be used by the Ethiopian or Shenzhen Airlines via contract.

  • Innovative Technological Solution/Internet

To save passenger time and improve the passenger experience across the airport, both airports offer mobile application, Wi-Fi services, self-service check-in kiosk, and automated passport control. In ATL there is also self bag-drop service. On the other hand, Delta Airlines is testing biometric-based self-service bag drop at PEK (Kang, 2017). In addition, there are global entry kiosk and mobile passport control services at ATL.

  • Transportation

Various transport choices are available at ATL and PEK such as taxis, car rental companies, shuttles, buses, metro, train, terminal shuttles.

  • Charging Station

Charging station for vehicles is provided by ATL.

  • Financial Services

There are banks, ATMs, currency exchange office at ATL and PEK. Also, the insurance products services are provided by PEK.

  • Religious facilities & service

Both airports allocate prayer rooms for the use of travelers and visitors. ATL even offers Chaplaincy Services for passengers and visitors.

  • Medical Services

Both airports have medical services. In addition, PEK has automated external defibrillators if it is needed.

  • Entertainment/Art

PEK provides more information about art/design of locations than ATL does. For instance, there are starry corridor, posing wall, water-drop mini-oasis landscape, airplane seats, “brilliant colors” lounge for the visitors in PEK. For the same purpose, ATL has an airport art program in order to improve and integrate art, exhibits and performances at ATL. Furthermore, there are Digital Interactive Experience Zone, underwater world area, children’s playground, forest playground for children, and a kid activity zone at PEK. Both airports have a garden for their visitors.

  • Baggage /luggage

Both airports provide left luggage and lost & found luggage services. PEK even offers free winter clothing safekeeping and luggage portage service.

  • Conference & Exhibition Services

Both airports provide conference and exhibition services.

  • Relaxing & Private Rooms

There is Minute Suites at ATL and Pay Lounge at PEK for sleeping/relaxing. SPA services are provided in Delta Lounge, ATL, and there is a mini-spa at PEK. Both airports have nursing station/rooms. In addition, there is a dressing room at PEK.

  • Smoking Area

Both airports have a smoking lounge/area for smokers.

  • Animal relief areas

There are animal relief areas and dog areas at PEK.

  • Other

The police station at PEK provides a temporary ID card if the valid card of the visitor and/or employees is lost, damaged or outdated. PEK also offers drinking water to visitors.

Concluding remarks and further research

Transformation in the tourism sector is a continuous process, stimulated by socio-economic, demographic, psychological, technological and other factors. The profile of today’s tourists differs keenly from their predecessors, and therefore, they demand different tourism services. New travel types such as recreation/holidays tourism, business tourism, cultural tourism, eco-tourism, study tourism, religious pilgrimage tourism, SPA tourism, medical tourism have now appeared. For this reason, airport operators have improved the quality of their services and extended their scope of services/facilities. Airports, which used to be just transfer points, offer a variety of services today to enhance their passenger experience.

Technology brings a lot of benefits, but also creates challenges. Information and communication technologies have led to changes in customer preferences, and as a result, the market is now changed. In order to compete in the market, all the tourism service providers including airports must offer the services that are demanded by this new generation of customers by innovating their business. Innovations in the airport business can appear in different forms like service innovations, process innovations, managerial and organizational innovations, and/or marketing innovations.

Further research in this field can examine the improvements and expansion of the scope of the airport facilities and services from a historical perspective. As mentioned above, the tourism trend changes can be easily observed within the airport industry. Further studies might directly focus on those improvements so as to understand the significance of the innovative services and facilities, which is critical to determine the relation between the innovation and performance of the busiest airports. Moreover, the motivation factors behind those improvements such as the effects of the catchment area, socio-economic power of the countries, demographic distribution, and the number of the airports in the country should be analyzed in order to fill this gap in the literature.

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Publisher

Future Academy

First Online

18.12.2019

Doi

10.15405/epsbs.2019.01.02.42

Online ISSN

2357-1330