International business and tourism global issues contemporary interactions (routledge international series in tourism busine

International Business and
Tourism
Whether it’s bungee jumping in Queenstown or visiting the Guinness factory in Dublin,
where we travel – and what we do when we get there – has changed significantly in the
past 20 years. This innovative textbook explores what is possibly the most unrecognised of
international service industries, placing tourism in the context of contemporary globalisation
and trade in services. It provides new perspectives on tourism as a form of international
business, and the implications for firms, the state and individuals.
Split into four separate sections, with introductions outlining the key themes in each, the
book examines such important topics as:
•
•
•
•

the role of governance and regulation in tourism services
the effects of increased global mobility on tourism entrepreneurship
how tourism businesses are becoming internationalised
why other business sectors are increasingly interested in tourism

Case studies are used throughout to highlight important issues, from developments in
the aviation industry to the rise of working holidays. This book gets to the core of a
crucial service industry, and is essential reading for any researcher or student of tourism or
international business.
Tim Coles is University Business Research Fellow and Senior Lecturer in Management in
the School of Business and Economics at the University of Exeter, UK, where he is also
the co-director of the Centre for Tourism Studies.
C. Michael Hall is Professor of Marketing in the Department of Management, University
of Canterbury, New Zealand; Visiting Professor, Faculty of Organisation and Management,
Sheffield Hallam University, UK; and a Docent at the Department of Geography, University

of Oulu, Finland. He is also co-editor of the journal Current Issues in Tourism.


Routledge International Series in Tourism, Business and Management
Edited by Tim Coles and C. Michael Hall

Taylor & Francis Group

LONDON AND NEW YORK

Routledge International Series in Tourism, Business and Management is an important
series that explores the key contemporary issues in the business and management of
tourism. The series is organised around two strands: core themes in the business and
management of tourism; and comparative international perspectives. Authored by some of
the world’s leading authorities on tourism, each book in the series aims to give readers
comprehensive, in-depth and accessible texts that combine essential theory and best
practice. Topics to be covered include international business and tourism, HRM in
tourism, tourism entrepreneurship, tourism and service quality, strategy in tourism and
marketing tourism.
This is the first book in the series.


International Business and
Tourism
Global issues, contemporary interactions

Edited by Tim Coles and C. Michael Hall


First published 2008

by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
Simultaneously published in the USA and Canada
by Routledge
270 Madison Ave, New York, NY 10016
This edition published in the Taylor & Francis e-Library, 2008.
“To purchase your own copy of this or any of Taylor & Francis or Routledge’s
collection of thousands of eBooks please go to www.eBookstore.tandf.co.uk.”

Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2008 Tim Coles and C. Michael Hall
All rights reserved. No part of this book may be reprinted or reproduced or
utilised in any form or by any electronic, mechanical, or other means, now
known or hereafter invented, including photocopying and recording, or in
any information storage or retrieval system, without permission in writing
from the publishers.
British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging in Publication Data
International business and tourism : global issues, contemporary
interactions / edited by Tim Coles and C. Michael Hall.
p. cm. – (Routledge international series in tourism, business &
management)
1. Tourism. 2. International trade. I. Coles, Tim. II. Hall, Colin Michael,
1961–
G155.A1I4985 2007
338.4'791–dc22
2007033807
ISBN 0-203-93103-3 Master e-book ISBN

ISBN10: 0–415–42430–5 (hbk)
ISBN10: 0–415–42431–3 (pbk)
ISBN10: 0–203–93103–3 (ebk)
ISBN13: 978–0–415–42430–1 (hbk)
ISBN13: 978–0–415–42431–8 (pbk)
ISBN13: 978–0–203–93103–5 (ebk)


Contents
List of figures
List of tables
List of contributors
Acknowledgements
1

Introduction: tourism and international business – tourism
as international business

vii
viii
x
xiii

1

C . M I C HAE L HAL L AND T I M C O L E S

PART I

Framing international business and tourism: governance and

regulation
2

Regulating the international trade in tourism services

27
33

C . M I C HAE L HAL L

3

Citizenship and the state: hidden features in the internationalisation
of tourism

55

T I M C OL E S

4

Nature and the environment as trans-boundary business strategies

70

JOHAN HULT M AN AND ST E FAN G Ö S S L IN G

PART II

The internationalisation of tourism businesses

5

Aeropolitics, global aviation networks and the regulation of
international visitor flows
DAVI D T I M OT HY DUVAL

85

91


vi

CONTENTS

6

International and transnational aspects of the global cruise industry

106

ADAM W E AVE R AND DAVI D T IM O T H Y D U VA L

7

International business networks and intercultural communications in
the production of tourism

124

NI C OL AI SC HE R L E AND T I M C O L E S

PART III

The internationalisation of tourism: practices and processes
8

The internationalisation of tourism commodity chains

143
149

JAN M OSE DAL E

9

Internationalisation in adventure tourism: the mobility of people,
products and innovations

167

KAT R I N B L UM B E R G

10

The internationalisation of tourism labour markets: working and
playing in a ski resort

181

TAR A DUNC AN

PART IV

Tourism and destinations in the internationalisation of business
11

International business, intellectual property and the misappropriation
of place: food, wine and tourism

195

201

R I C HAR D M I T C HE L L

12

Sports facilities and transnational corporations: anchors of urban
tourism development

220

DANI E L M ASON, GR E G R AM SH AW A N D TO M H IN C H

13

International car manufacturers, brandscapes and tourism:
engineering the experience economy

238

T I M C OL E S

14

Partnerships and social responsibility: leveraging tourism
and international film business

256

SUE B E E TON

15

Conclusion: mobilities of commerce

273

C . M I C HAE L HAL L AND T I M C O L E S

Index

284


Figures
1.1
1.2
1.3

1.4
1.5
2.1
2.2
2.3
4.1

4.2
7.1
13.1
13.2
13.3
14.1
14.2
14.3
15.1

Basic typology of tourism- and travel-related international business
dimensions
The international business environment of tourism
Classifications of temporary mobility in space and time
Extent of temporary mobility in space and time
The knowledge field of international business and tourism
Constraining and enabling regulatory framework for international
mobility
GATS modes of supply, their significance for tourism and measures
affecting them
Multilayered tourism governance
Famous for their striking visual appearance from the outside, inside the
biomes at the Eden Project nature is dislocated from its (Humid Tropics)

origins
Nature as business strategy within tourism
The dynamics of intercultural overlapping situations
Porsche Leipzig
The Gläserne Manufaktur, Dresden
Immersion in the brand world: visitors are introduced to the VW Phaeton
at the Gläserne Manufaktur
‘Satriale’s Pork Store’ in New Jersey: a shrine to Sopranos fans or simply
a vacant retail unit in an originally Scots–Irish neighbourhood
The high level of exposure for The Da Vinci Code movie audio guide at
the Louvre
Hollywood Boulevard gears up for the 2004 Oscar ceremony
The disciplinary spaces of international trade in services in relation to
GATS modes of supply

9
11
13
13
14
38
46
51

75
81
130
245
250
250

261
261
266
275


Tables
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
2.1
2.2
2.3
2.4
2.5
3.1
3.2
5.1
5.2
5.3
6.1
6.2
6.3
6.4
6.5

International tourism arrivals and forecasts, 1950–2020
Benchmarking the global trade in travel and tourism against the GDP of
15 leading economies in the world
World exports of merchandise and commercial services, 2000–2005
Share of travel services in total trade of commercial services by selected
region, 2005
Top 15 exporters and importers of travel services
Export/import relationship in select countries
The structure of the WEF TTCI
Relationships between international tourism arrivals for countries by
rank and WEF competitiveness rankings
Resolutions of UN Global Code of Ethics for Tourism relevant to
international mobility of persons
Estimates of passport possession for selected countries
Examples of multilateral mobility frameworks
Obstacles to the liberalisation of the travel and tourism sector as
identified by the US
Proposals with respect to the liberalisation of the travel and tourism
sector as identified by Columbia
The comparative cost of private health care treatments in selected
international markets
Selected non-airline strategic partners from which Air New Zealand
Airpoints Dollars can be earned
Freedoms of the air
Major global alliances – key members
Major global airline alliances – key statistics
Worldwide demand for cruise tourism (millions)
Major cruise lines and their ships
Carnival Corporation: a collection of cruise-line brands

Corporate consolidation within the cruise industry
The cruise industry and environmental violations: some examples

2
3
4
5
6
7
16
17
36
39
43
47
48
62
64
93
100
101
109
111
112
113
118


TABLES

7.1 The world according to The Economist: some but not all of the essential
considerations of ‘doing business’ with partners from other cultures
7.2 Approaches to business management in intercultural situations
7.3 The culture shock phenomenon
7.4 The main attributes of the German and Moroccan respondents
8.1 Comparison of different types of chain analysis
8.2 Characteristics of different commodity chain governance forms
8.3 Top tour operator’s share of all ATOL holidays, 1982–2005 (in per cent)
11.1 Key international agreements involving intellectual property rights
11.2 Examples of cases of intellectual property actions taken by
the Champagne region
11.3 Examples of place.com cases brought under the UDRP
11.4 100% Pure New Zealand campaign rip-offs
12.1 Beverage associations for major league stadia, United States
12.2 Examples of stadium name changes, before and after corporate
involvement, United States
12.3 Name changes during FIFA 2006 World Cup in Germany
12.4 Examples of defining features for Baltimore, Cleveland and St Louis
tourist bubbles
13.1 The car brand structure of the Volkswagen Group
13.2 Basic data about Porsche Leipzig
13.3 VW Event Travel holidays in 2006
14.1 Selected international film festivals
14.2 Film and TV guidebooks
15.1 Modal importance to service trade annually
15.2 Significance of international tourism to poor countries

128
129
131

133
155
158
159
207
211
212
215
226
227
230
233
242
244
252
265
267
276
278

ix


Contributors
Sue Beeton is Associate Professor in Tourism in the Faculty of Law and Management at
La Trobe University, Melbourne, Australia. She has been studying film tourism since
1998 and has been co-convenor of the biennial International Tourism and Media (ITAM)
conferences in Australia.
Katrin Blumberg was, at the time of writing, a PhD student in the School of Business at
the University of Otago, New Zealand. Her studies of networks in adventure tourism

draw directly upon her business experience in adventure tourism in Switzerland and
New Zealand.
Tim Coles is University Business Research Fellow and Senior Lecturer in Management
in the School of Business and Economics at the University of Exeter, UK, where he is
the co-director of the Centre for Tourism Studies. His research interests cover tourism
and human mobilities, knowledge management and project ecologies of tourism and the
interface between tourism, business and management studies.
Tara Duncan is Lecturer in the School of Business at the University of Otago, New Zealand.
She has held teaching positions at Durham University and University College London
and was also the International Travel Catering Association Research Officer in the School
of Management at the University of Surrey. With a background in human geography,
her research interests focus on the ‘working tourist’ and current debates in mobility,
temporary migration and transnationalism.
David Timothy Duval is Senior Lecturer and Director of International Business in the
School of Business, University of Otago, New Zealand. His research interests, for the
most part, centre upon aviation management and he has written on issues of aeropolitics,
alliances and international air service agreements.
Stefan Gössling is Associate Professor in the Department of Service Management,
Lund University, and Research Coordinator of the Centre for Sustainable and Geotourism, Western Norway Research Institute. He studied Geography and Biology at
Münster University, Germany. His PhD in Human Ecology (Lund University, Sweden)
was on human–environmental relations with tourism. His research interests include


CONTRIBUTORS

sustainable tourism, mobility studies, and interdisciplinary perspectives on tourist–nature
interactions.
C. Michael Hall is Professor of Marketing in the Department of Management, University of
Canterbury, New Zealand and Docent, Department of Geography, University of Oulu,
Finland. He also holds a Visiting Professorship at Sheffield Hallam University, UK.

Co-editor of Current Issues in Tourism, he has wide-ranging research, teaching and
publishing interests in tourism and human mobility, regional development, servicescapes,
gastronomy and environmental history.
Tom Hinch is Professor in the Faculty of Physical Education and Recreation in the
University of Alberta in Edmonton. His primary research programme focuses on the
confluence of sport and tourism with a particular interest in the nature of sport tourism
places. He has also made substantial contributions to the literature on tourism and
indigenous peoples.
Johan Hultman is Senior Lecturer and Associate Professor in the Department of Service
Management, Lund University, Campus Helsingborg, and is involved with tourism and
service studies in research and teaching. Johan holds a PhD in Cultural Geography.
Daniel Mason is Associate Professor in the Faculty of Physical Education and Recreation
and Adjunct Professor in the School of Business at the University of Alberta. His
research takes an interdisciplinary approach and focuses on the business of sport and the
relationships between its stakeholders, including all levels of government, sports teams
and leagues, and the communities that host teams.
Richard Mitchell is Senior Lecturer in the School of Business at the University of Otago
where he has been researching wine, food and tourism since 1998 in New Zealand,
Australia and the Mediterranean. He focuses primarily on two areas of wine and food
tourism: consumer behaviour and regional development. In 2007 he will visit the Chair
in Champagne Management (France) for further research on the intellectual property of
place.
Jan Mosedale is Lecturer in the School of Business at the University of Otago, New Zealand.
His PhD research at the University of Exeter on the corporate geographies of transnational
corporations was supported by a studentship from the Economic and Social Research
Council (ESRC).
Greg Ramshaw is a doctoral student in the Faculty of Physical Education and Recreation at
the University of Alberta in Edmonton, Canada. His primary research interests are sport
tourism and heritage tourism, and his doctoral research project specifically examines the
construction of sport heritage tourist attractions. His work has been published in Current

Issues in Tourism and the Journal of Sport Tourism.
Nicolai Scherle is Senior Lecturer in the Department of Cultural Geography at the Catholic
University of Eichstätt-Ingolstadt, Germany. His monograph on the presentation of
cultural aspects in German-language travel guides was awarded a research prize by
the International Tourism Fair (ITB) in Berlin in 2000.

xi


xii

CONTRIBUTORS

Adam Weaver is Lecturer in Tourism Management in the Victoria Management School at
the Victoria University of Wellington in New Zealand. His recent research has examined
relationships between the credit card and tourism industries and the ways in which
data surveillance, commerce and tourism are intertwined. Adam’s work has appeared in
Annals of Tourism Research, the International Journal of Tourism Research and Tourism
Geographies.


Acknowledgements
This book is the first volume in a new series, the Routledge International Series in Tourism,
Business and Management. At Taylor & Francis, we would like to thank Andrew Mould,
Jacqueline Curthoys, Francesca Heslop, Terry Clague and Simon Whitmore as Routledge
Commissioning Editors for their valuable advice not only in developing this book, but
also in nurturing and positioning the new series. As the book has been connected with
other issues, we would like to thank our contributors for their patience, diligence and
professionalism over the past couple of years. Several of our friends, colleagues and students
have offered interesting insights and advice along the way and we’d like to recognise the

input of Andrew Church, David Duval, Rebekka Goodman, Nicolai Scherle and Gareth
Shaw. We owe a deep debt of gratitude to Vanessa and Jody for their love, support
and patience, and the priceless reminders that there is more to life than writing books.
Michael Hall would like to thank Petrina Dodd (formerly University of Otago) for her
kind assistance in the research contributing to Chapter 2 as well as Nicola van Tiel and
Nicolette le Cren for comments with respect to services. Johan Hultman would like to
acknowledge the financial support of Sparbanksstiftelsen Skåne for the work presented in
Chapter 4. Jan Mosedale acknowledges the support of the Economic and Social Research
Council (ESRC) for a doctoral studentship (PTA-030-2002-00677) during which much of
the research contained in this chapter was conducted. Tim Coles would like to thank Dr
Oliver Weigel (formerly Director of Stadtentwicklung, Leipzig city council), Dr Bianca
Meinecke (Audi AG), Dr Nicolai Scherle (Catholic University of Eichstätt-Ingolstadt) and
Steve Jakes (University of Exeter) for their kind assistance and advice in the research
contributing to Chapter 13. The assistance of the British Academy in the form of a small
research grant (SG33303), during which some of the initial research was undertaken, is
also recognised. Figures 4.1, 13.1, 13.2, 13.3, 14.1 and 14.3 are reproduced courtesy of Tim
Coles. Figure 1.1 is reproduced courtesy of Tim Coles and Michael Hall. Figures 1.3, 1.4,
2.1, 2.3 and Table 2.3 are reproduced courtesy of Michael Hall. Figure 14.2 is reproduced
courtesy of Sue Beeton.



1

Introduction: tourism and
international business – tourism
as international business
C. Michael Hall and Tim Coles

Learning objectives

After considering this chapter, you will be able to:
recognise key features of the relationship between tourism and international
business;
understand the different categories of international trade in tourism services;
identify elements of the business environment for international tourism
businesses.

Key terms
international tourism;
international business;
services;
cross-border supply;
consumption abroad;
commercial presence;
presence of natural persons.

INTRODUCTION: ANOTHER RECORD YEAR FOR WORLD TOURISM
If one follows the line taken by many governments, institutions and public officials then
tourism is a major international industry. The United Nations World Tourism Organization
(UNWTO 2007a) reported under the heading ‘Another record year for world tourism’ that
there were 842 million international tourism arrivals in 2006 (an increase of 36 million
or 4.5 per cent on the previous year) and that the world is well on the way to reaching


2

C. MICHAEL HALL AND TIM COLES

Table 1.1 International tourism arrivals and forecasts, 1950–2020
Year

World

Africa

Americas

Asia & Pacific

Europe

Middle East

1950
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005

25.3
69.3
112.9
165.8
222.3

278.1
320.1
439.5
540.6
687.0
806.8

0.5
0.8
1.4
2.4
4.7
7.2
9.7
15.2
20.4
28.3
37.3

7.5
16.7
23.2
42.3
50.0
62.3
65.1
92.8
109.0
128.1
133.5

0.2
0.9
2.1
6.2
10.2
23.0
32.9
56.2
82.4
110.5
155.4

16.8
50.4
83.7
113.0
153.9
178.5
204.3
265.8
315.0
395.9
441.5

0.2
0.6
2.4
1.9
3.5

7.1
8.1
9.6
13.7
24.2
39.0

Forecast
2010
2020

1006
1561

47
77

190
282

195
397

527
717

36
69

Source: WTO (1997, 2006).

the UNWTO’s 2020 vision forecast/target of 1.6 billion international arrivals in 2020
(Table 1.1). In addition, the tourism sector was touted as ‘underscoring the links to economic
progress’ while ‘as one of the most dynamic economic sectors, tourism has a key role to play
among the instruments to fight against poverty, thus becoming a primary tool for sustainable
development’ (UNWTO 2007a: no pages).
The economic dimensions of tourism are also significant on an international basis. Indeed,
they are of orders of magnitude that are difficult to imagine or comprehend for most people.
According to the World Travel and Tourism Council (WTTC 2007) forecasts for the world
travel and tourism industry in 2007:
• Travel and tourism demand is expected to generate US$7,060 billion of economic
activity worldwide, growing to US$13,231 billion by 2017.
• Of total world exports, travel and tourism accounts for 12 per cent (US$1,847.8 billion)
and is expected to grow at a rate of 4.6 per cent per annum in the immediate future.
• Travel and tourism is expected to contribute 3.6 per cent to gross domestic product
(GDP) (US$1,851 billion), rising in nominal terms to US$3,121.7 billion (3.4 per cent
of total GDP) by 2017. When including the direct and indirect impact of the industry,
tourism is expected to account for 10.4 per cent of global GDP (equivalent to US$5,390
billion), rising to 10.7 per cent (US$9,781 billion) by 2017.
• Global travel and tourism economy employment is estimated to reach 231.2 million
jobs, representing 8.3 per cent of total employment worldwide (1 in every 12 jobs). By
2017, this figure is expected to rise to 262.6 million jobs, accounting for 8.3 per cent of
total employment.


INTRODUCTION

Table 1.2 Benchmarking the global trade in travel and tourism against the GDP of 15 leading
economies in the world
Ranking

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

Economy

GDP (US$ millions in 2005)

United States*
Travel and tourism – direct and indirect
Japan*
Germany*
China
United Kingdom*
France*
Travel and tourism – direct only
Italy*
Spain

Canada*
India
Brazil
Korea, Rep.
Mexico
Russian Federation*
Australia

12,416,505
5,390,000
4,533,965
2,794,926
2,234,297
2,198,789
2,126,630
1,851,000
1,762,519
1,124,640
1,113,810
805,714
796,055
787,624
768,438
763,720
732,499

Source: Adapted from World Bank (2007: 1) and WTTC (2007).
Note: *G8 member.

Taking just the third set of claims about GDP: Table 1.2 benchmarks the earnings generated

by travel and tourism globally against the top 15 economies in terms of their total GDP in
2005 as calculated and published by the World Bank. The value of travel and tourism would
appear to be greater than the total value of all final goods and services of three members of
the G8 (Italy, Canada and Russia), or the group of the world’s leading industrialised nations.
If the direct and indirect impacts of travel and tourism are considered, then only the United
States has larger GDP.
Of course, these are only broad comparisons and care must be taken especially with respect to
indirect earnings. Nevertheless, even such a broad benchmarking emphasises two important
points. Not only is it easy to see why states are keen to capitalise on the benefits of travel
and tourism, but paradoxically, the sheer scale of travel and tourism earnings makes it all
the more curious that tourism is marginalised in major global debates over the governance
of society, economy, culture and environment. It is even more staggering, as we shall
argue below, that tourism struggles for legitimacy in studies of international business.
To be clear, all of this is not to start an account of international tourism yet again with
the claim that tourism is the world’s largest industry, as not only are the methodological
and empirical accounts of tourism numbers and economic impact open to question, but so
too is the very question of whether tourism can actually be treated as an industry. However,
what it does do is highlight the undeniable fact that tourism is an international economic

3


4

C. MICHAEL HALL AND TIM COLES

activity of considerable importance with associated implications for international business
and international relations.
According to World Trade Organization (WTO) statistics, travel accounted for about
5.4 per cent of world exports of merchandise and commercial services in 2005, representing

28.4 per cent of world exports of commercial services (see Table 1.3). However, it is perhaps
surprising to some readers, given the publicity surrounding international tourism growth,
that while the absolute value of travel has been increasing, the relative value of travel as
a contributor to world exports of commercial services has actually been declining since
1990 when it accounted for approximately 34 per cent of the total value (WTO 2006: 109).
This pattern is demonstrated on a regional scale in Table 1.4. The reasons for such shift
in the relative value of service exports primarily relates to the development of cheaper
travel and communications that has allowed relatively more high value services to be

Table 1.3 World exports of merchandise and commercial services, 2000–2005
Annual percentage change
Product group

Value
2005
($bn)

Share
2000
(%)

Share
2005
(%)

2000–5
(%)

Merchandise
Agricultural

products
Fuels and mining
products
Manufactures
Commercial
services
Transportation
Travel
Other commercial
services

10,159 100.0
852
8.8

100.0
8.4

10
9

13.7

17.2

7,312 74.9
2,415 100.0

1,748

570
685
1,160

23.3
32.1
44.6

2002
(%)

2003
(%)

2004
(%)

2005
(%)

5
6

17
16

22
15

13

8

15

−1

24

33

36

72.0
100.0

9
10

5
7

16
14

21
20

10
10

23.6
28.4
48.1

10
7
12

5
5
10

13
10
18

24
18
18

12
8
11

Source: WTO (2006).
Notes:
WTO Definitions: Transportation covers all transportation services that are performed by residents of one
economy for those of another and that involve the carriage of passengers, the movement of goods (freight),
rentals (charters) of carriers with crew, and related supporting and auxiliary services (United Nations et al.
2002: 36); travel covers primarily the goods and services acquired from an economy by travellers during visits

of less than one year to that economy. The goods and services are purchased by, or on behalf of, the traveller
or provided, without a quid pro quo (that is, are provided as a gift), for the traveller to use or give away (United
Nations et al. 2002: 38–9; a traveller is an individual staying for less than one year in an economy of which
he or she is not a resident for any purpose other than (1) being stationed on a military base or being an
employee (including diplomats and other embassy and consulate personnel) of an agency of his or her
government; (2) being an accompanying dependant of an individual mentioned under (1), or (3) undertaking
a productive activity directly for an entity that is a resident of that economy (United Nations et al.2002: 39).


INTRODUCTION

Table 1.4 Share of travel services in total trade of commercial services by selected region, 2005
Region

Exports
2000 (%)

Exports
2005 (%)

Imports
2000 (%)

Imports
2005 (%)

North America
South and Central America
Europe
European Union (15 in 2000,

25 in 2005)
Africa
Asia

35.7
53.3
30.4
30.3

30.2
47.2
26.8
25.7

33.0
30.8
31.0
30.8

27.2
24.0
28.5
28.1

48.9
26.9

49.7
25.4

20.4
27.4

19.7
25.1

Source: Abridged from WTO (2001: 159, 2006: 184).

traded in financial services than in travel and tourism services (WTO 1998). Transportation
services are usually regarded as the least dynamic category of services while within
‘other commercial services’ sub-categories such as financial services (including banking
and insurance services), construction services, communication services and computer and
information services have all demonstrated rates of export growth higher than that of travel.
Even though the relative proportion of tourism’s contribution to international trade in
services has declined, tourism remains an extremely significant contributor to the global
economy, although its economic contribution, as with the flow of travellers, is uneven.
Table 1.5 illustrates the top 15 exporters and importers of travel services on a national basis.
The top 15 exporters account for approximately 62 per cent of travel exports while the
top 15 importers account for approximately 68 per cent of all travel imports. A number
of countries such as the United Kingdom, United States, Japan and Germany demonstrate
significant imbalances between exports and imports of travel services (Table 1.6). The US,
Spain and Italy have a significant positive balance of exports over imports which is reflected
not only in their role as tourism destinations but just as importantly to the extent that nationals
of those countries travel and spend internationally. In contrast, the UK, Germany and Japan
are all significant international tourism destinations in their own right, however outbound
travel and expenditure still significantly outnumbers inbound travel. The UNWTO (WTO
2006a, 2006b) ranked the UK sixth in the world in 2005 in terms of international arrivals
and Germany eighth, while they were ranked fifth and seventh respectively in terms of
international tourism receipts. Yet the international trading significance of travel services
goes well beyond the developed world, with tourism being reported as the primary source

of foreign exchange earnings in 46 of the 49 poorest nations that the United Nations (UN)
describes as the least developed countries (Hall 2007).
Given the significance of tourism in the global economy in its own right and as an
enabler of business mobility and connectivity (Malecki 2004), as well as the importance of
international tourism for numerous national and regional economies, it may be expected that
tourism has been a significant object of scholarship for the field of international business
studies. However, this has most certainly not been the case with tourism rarely being a
focal point of articles in the major international business journals or even in international

5


Table 1.5 Top 15 exporters and importers of travel services

Exporters
United States
Spain
France
Italy
United Kingdom
China
Germany
Turkey
Austria
Australia
Canada
Greece
Japan 2
Mexico
Switzerland

Top 15
Importers
United States
Germany
United Kingdom
Japan
France
Italy
China
Canada
Russian
Federation
Netherlands
Korea,
Republic of
Spain
Belgium
Hong Kong,
China
Australia
Top 15

Value
2005
($ bn)

World
share
1990
(%)1

World
share
2000
(%)

World
share
2005
(%)

Percentage
change
2000−5

102.0
47.7
42.2
35.7
30.3
29.3
29.2
18.2
15.6
14.9
13.6
13.6
12.4
11.8
11.3

430.0

19.0
7.0
7.6
6.2
5.9
0.7
5.4
1.2
5.1
1.6
2.4
−
2.1
−
−
70.4

20.5
6.2
6.5
5.7
4.5
3.4
3.9
1.6
2.1
1.9
2.3

1.9
1.8
1.7
1.6
65.6

14.9
7.0
6.2
5.2
4.4
4.3
4.3
2.7
2.3
2.2
2.0
2.0
1.8
1.7
1.6
62.5

1
10
6
5
7
13
9

19
9
11
5
8
8
76
8
6

73.6
73.0
59.5
37.6
31.2
22.7
21.8
18.3
17.8

14.6
13.0
7.0
9.6
4.7
4.0
0.2
4.2
−

15.1
11.9
8.6
7.2
4.0
3.5
3.0
2.8
2.0

11.4
11.3
9.2
5.8
4.8
3.5
3.4
2.9
2.8

16.1
15.3

2.8
−

2.8
1.6

15.0

14.8
13.3

−
2.1
−

11.5
440.0

−
73.5

Percentage
change
2003

Percentage
change
2004

Percentage
change
2005

−2
24
13
16
10

−15
20
56
24
21
−1
9
1
15
16
10

13
14
11
13
24
48
19
20
11
21
21
18
27
9
13
17

8

6
4
1
7
14
6
14
2
9
6
7
10

2
7
9
3
12
8
11
8
15

−1
23
15
9
20
22
−1

14
14

14
9
18
32
22
−1
26
19
22

6
3
5
−2
9
11
14
15
13

2.5
2.4

6
17

12

−3

12
22

−2
24

1.3
−
2.8

2.3
2.3
2.1

20
−
1

24
20
−8

34
14
16

24
6

0

1.4
72.0

1.8
68.6

13
−

20
11

41
17

12
7

9
7

Source: WTO(2001: 160, 2006: 184).
Notes:
1. 1990 world share percentages derived from WTO (2001), world share percentages for 2000 use WTO
(2006) figures where possible as these are the most recent revised figures.
2. Secretariat estimates for exports prior to 2003 are based on the new methodology applied by the Bank of
Japan.

INTRODUCTION

7

Table 1.6 Export/import relationship in select countries
Country

Export value
($ bn)

Import value
2005 ($ bn)

Net gain or
loss ($ bn)

Ratio
export:import

United States
Spain
France
Italy
United Kingdom
China
Germany
Australia
Canada
Japan

102.0
47.7
42.2
35.7
30.3
29.3
29.2
14.9
13.6
12.4

73.6
15.0
31.2
22.7
59.5
21.8
73.0
11.5
18.3
37.6

28.4
32.7
11
23
−29.2
7.5
−43.8

3.4
−4.7
−25.2

1:0.72
1:0.31
1:0.74
1:0.64
1:1.96
1:0.74
1:2.50
1:0.77
1:1.35
1:3.03

Source: Derived from WTO (2006).

business texts (Hall 2003a). For example, on the resources page of the Academy of
International Business as of mid-2007 no tourism journals are listed in the journal resources
section and no tourism research associations in the professional organisations section
( Similarly, as a body of knowledge tourism studies, which is
sometimes accused of adopting theoretical developments and insights from other business
and social science disciplines rather than developing its own (Tribe 1997, 2000; Franklin
and Crang 2001), has not drawn on the significant body of international business literature
in all but the most limited extent. Despite apparently obvious connections there has been
relatively little academic dialogue between the two study areas.
This book therefore aims to connect cutting-edge research and critical thinking in tourism
and international business in order to develop greater understanding and conceptualisation
of tourism as a form of international business as well as to mutually inform the two academic
fields. This first chapter seeks to outline some of the empirical and philosophical connections

between the fields as well as providing several frameworks with which to understand tourism
in international business terms.

CONCEPTUALISING TOURISM AND INTERNATIONAL BUSINESS
‘International business’ as a term is conceptualised and discussed in two common ways.
The first centres on the practice of international business in a more general and abstract
manner. It relates to the performance of ‘doing business’ internationally; that is, people and
organisations interacting with one another in order to transact exchanges of capital, labour
and knowledge. This requires contact, social relations and the politics of intermediation.
In the case of tourism, this political process and interaction results in outcomes, perhaps
in terms of tourist spending, investment in tourist attractions and facilities, and/or setting
the regulatory frameworks and operating environments in which tourism will flourish and
tourism-related businesses will function. This first approach is similar to the way in which


8

C. MICHAEL HALL AND TIM COLES

any service is traded internationally. Thus, one of the best means by which this can be
understood is via the four modes of international supply of services under the General
Agreement on Trade in Services (GATS) (UN et al. 2002) (see Figure 1.1).
Cross-border supply: from the territory of one into the territory of another (generally referred
to as mode 1 under GATS). This mode is similar to the traditional notion of trade in goods
where both the consumer and the supplier remain in their respective territory when the
product is delivered, such as freight transport services or e-ticketing for travel and tourism
services. Supply takes place when the consumer remains in his or her home territory while
the service crosses national borders; that is, the supplier is located in a different country
with the delivery of the service achieved, for example, by various forms of information and
communications technology (ICT) as well as traditional mail.

Consumption abroad: a consumer moves outside his or her home territory and consumes
services in another country (mode 2). International tourism provides the classic example of
consumption abroad although, as well as leisure consumption, it may also include medicalrelated travel of non-residents and education and language courses (usually under GATS
statistical advice this would be classified as being under 12 months in duration, however
countries have a range of classification schemes for such consumption).
Commercial presence: the service is provided by a service supplier of a country through
commercial presence in the territory of another at the various stages of production and
delivery, as well as after delivery (mode 3). Significantly for tourism, under GATS
‘supply of a service’ includes production, distribution, marketing, promotion, sale and
delivery. Examples include transport ticketing available via a foreign-owned company or
accommodation in a foreign-owned hotel.
Presence of natural persons: occurs when an individual has moved into the territory of the
consumer to provide a service, whether on his or her own behalf or on behalf of his or her
employer (mode 4) and covers both self-employed persons as well as employees. A natural
person is a human perceptible through the senses and subject to physical laws in contrast to
an artificial or juridical person, such as a corporation or an organisation that the law treats for
some purposes as if it were a person distinct from its owner or members. This category covers
only non-permanent employment in the country of the consumer. However, to complicate
matters there is no agreed definition of ‘non-permanent’ employment under GATS or other
international agreements, although under each country’s GATS commitments, the temporary
status generally covers a period of two to five years, with it being different for different
categories of natural persons. Mode 4 is becoming increasingly important for international
tourism in both an empirical sense, with respect to the growth in seasonal international
workforce or short-term labour migration, and in a conceptual sense, with the growth of the
concept of working holidays.
The second broad conceptualisation focuses on the bodies involved in international business,
typically those firms undertaking it. Indeed, arguably the firm has become the dominant unit
of analysis in studies of international business. In this instance ‘international business’ is
used as a synonym for firms where the singular is used practically as a collective noun
for several businesses. Here the emphasis is on the international business as a body, an

INTRODUCTION

Dimensions
International business
to business (B2B)
relationships as part of
the supply chain of travel
business in Country X
Sales and distribution to
end customer (mode 1)
International B2B
relationships where
Business B acts as part of
the sales and distribution
channel for Business A
travel products
Business A sells travel
products to end
customer in Country Y
either via Branch A or
Subsidiary B in Country Y
Business A sells travel
products directly to
customer in Country Y
(i.e. via web or
telemarketing)

COUNTRY X

COUNTRY Y

Business A

Business B

Business A

Business B
Customer

Business A

Business
A(B)
Customer

Business A
Customer

International mobility and
consumption (mode 2)
Individual from Country X has a
second home in Country Y
Business A sells directly
to customer in Country X
after customer from
Country Y has entered
Country X (standard

international tourism)
International marketing
(mode 3)
Destination marketing
organisation in Country X
promotes to market in
Country Y
International labour
mobility (mode 4)
Travel Business A hires
staff from Country Y
while still in Country Y
Travel Business A hires
staff from Country Y after
individuals from Country
Y have already entered
Country X

Business A

Customer

Destination
marketing
organisation

Market Y

Business A
Employee

Business A

Employee

Business tourism (mode 4)
Individual from Country X travels to
Country Y to engage in travel and
tourism service

Figure 1.1 Basic typology of tourism- and travel-related international business dimensions

9


10

C. MICHAEL HALL AND TIM COLES

organisation or an institution. In this sense, studies of international business are understood
to include accounts of the management, marketing, organisation, operation, governance and
regulation of particular commercial entities. ‘International business’ might understandably
generate stereotypical connotations of transnational corporations (TNCs) by virtue of their
size, presences, competencies and requirements to operate in markets in more than one state.
While TNCs are a key element of the book, small- and medium-sized tourism enterprises
(SMTEs) are also considered, particularly as mode 2 of international trade in terms of
consumption abroad means that even some of the smallest, even micro-tourism firms are
engaged in international business (Jones and Haven 2005). Furthermore, it is increasingly
common to find SMTEs operating across borders via e-business.
In tourism the organisational dimension is often extended beyond the private sector to

incorporate the activities of government agencies that are engaged in tourism promotion
and marketing to international markets as well as, in some jurisdictions, owning tourism
infrastructure. In addition, the development of public–private partnerships has been an
extremely widespread phenomenon in western countries, particularly with respect to
urban redevelopment for tourism, leisure and retail purposes (Hall 2008). Some of these
partnerships between state and non-state actors are spread across geographical scales,
including the international (Hall 2005).
Both broad conceptualisations of international business are used in this book. The primary
focus though is international businesses with cross-border operations that engage in tourism
as a means of fulfilling their business objectives. The book examines how tourism (widely
defined) benefits from the internationalisation of business in terms of such dimensions
as profitability, pricing, service delivery, product development and knowledge transfer.
‘Doing business’ in the tourism sector shares many common characteristics with trade in
other services, but crucially there are key differences too in the way that tourism businesses
operate and how tourism products are produced and consumed; hence the book aims to
deepen understanding in international business studies of a core sector and its cross-border
dynamics. Tourism firms are not the exclusive focus of this book. Tourism may be the
core concern of the business (e.g. airlines, cruise lines, hotel chains, tour operators) or
alternatively it may be a secondary activity designed to ensure that other primary commercial
interests are realised (e.g. vintners, car manufacturers, food and drink producers, and
film production companies). Further important dimensions stressed in this book are the
different scales of governance from the local to the international in which international
tourism is regulated, as well as the embeddedness of firms in destinations and their business
environment (Figure 1.2).
Figure 1.2 illustrates the way in which there are multiple layers of environmental analysis
depending on whether the initial focus is a specific product, firm, destination or even
industry. The industry environment is the core of the firm’s business environment and
it is formed by competitors, suppliers and other stakeholders, such as, but not restricted
to, government agencies, non-government organisations, interest groups and consumers.
Customers are regarded as a subset of the potential pool of consumers as a firm’s actions

can influence the size of any potential market for its product separate from an existing
customer base (see Chapter 13). The firm and its immediate industry environment is in