Tourism in the Age of Alliances, Mergers and Acquisitions (English Version)
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Tourism in the Age of Alliances, Mergers and Acquisitions Delivered by http://www.e-unwto.org Georgios Drakopoulos (307-99-294) Tuesday, March 01, 2011 8:32:21 AM Copyright © 2002 World Tourism Organization TOURISM IN THE AGE OF ALLIANCES, MERGERS AND ACQUISITIONS Original: French ISBN: 92-844-0514-9 Published by the World Tourism Organization All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, electrostatic, mechanical, magnetic tape, photocopying, recording, or otherwise, in whole or in part, without the prior permission of the World Tourism Organization. The appellations employed in this publication are not to be construed as a stand on the part of the Secretariat of the World Tourism Organization with respect to the legal status of the countries, territories, cities or regions, or their authorities, nor to the location of their borders or boundaries. Supervised by the Market Intelligence and Promotion Section of the World Tourism Organization Printed by the World Tourism Organization Madrid, Spain Delivered by http://www.e-unwto.org Georgios Drakopoulos (307-99-294) Tuesday, March 01, 2011 8:32:21 AM NOTE TO READERS.........................................................................................................i FOREWORD ................................................................................................................. iii INTRODUCTORY REMARKS RELATING TO THE EVENTS OF SEPTEMBER 11, 2001...................................................................................................v PART 1: AN OVERVIEW OF THE CONSOLIDATION PHENOMENON AND ANALYSIS OF THE THREE SECTORS ........................................................................ 1 I.1 TOURISM AND THE TREND TOWARDS CONSOLIDATION ............................................... 1 I.1.1 THE EMERGENCE OF A GLOBAL MARKET............................................................. 1 I.1.2 MERGER MANIA................................................................................................ 1 I.1.3 STRATEGIC ALLIANCES ..................................................................................... 3 I.1.4 THE TRAVEL BOOM: A MAJOR CHALLENGE FOR THE INDUSTRY ............................ 3 I.1.5 THE GROWTH OF TECHNOLOGY: THE INTERNET REVOLUTION .............................. 4 SE-COMMERCE: THE WAVE OF THE FUTURE..................................................... 4 SMOBILE COMMERCE (M-COMMERCE).............................................................. 5 I.1.6 DEVELOPING ALLIANCES TO MEET THE DEMANDS OF TOURIST TRAFFIC ................ 6 I.2 THE AIRLINE INDUSTRY............................................................................................ 8 I.2.1 BACKGROUND AND ISSUES................................................................................ 8 SRESTRICTIONS ON SHARE-HOLDING............................................................... 8 I.2.2 A TYPOLOGY OF INTERNATIONAL ALLIANCES ...................................................... 9 SVARIOUS TYPES OF ALLIANCES ..................................................................... 9 SINTERLINING: THE ANCESTOR OF MODERN ALLIANCES .................................... 9 SCODE SHARING: AN AGREEMENT ON SPECIFIC ROUTES................................... 9 SCODE SHARING: HEALTHY COMPETITION?.................................................... 10 SANTITRUST IMMUNITY: A STEP TOWARDS INTEGRATION ................................ 10 SALLIANCES BASED ON RESOURCE SHARING.................................................. 10 I.2.3 PORTRAIT OF THE BIG FIVE INTERNATIONAL ALLIANCES ..................................... 10 SWINGS ...................................................................................................... 13 SSTAR ALLIANCE ......................................................................................... 13 S Delivered by http://www.e-unwto.org Georgios Drakopoulos (307-99-294) Tuesday, March 01, 2011 8:32:21 AM QUALIFLYER .............................................................................................. 13 SONEWORLD................................................................................................ 13 SSKYTEAM .................................................................................................. 14 I.2.4 ALLIANCES, MERGERS AND ACQUISITIONS IN THE AIRLINE INDUSTRY.................. 14 I.2.5 FROM CODE SHARING TO EQUITY INVESTMENT ................................................. 15 STHE NORTH AMERICAN MARKET.................................................................. 15 STHE EUROPEAN MARKET ............................................................................ 16 STHE ASIA-PACIFIC MARKET ......................................................................... 17 STHE MIDDLE EAST MARKET......................................................................... 17 I.2.6 THE FUTURE OF ALLIANCES............................................................................. 17 STHE ALLIANCE WALTZ: CHOOSE YOUR PARTNER!.......................................... 17 STOWARDS A COMMON IDENTITY................................................................... 18 SINCREASED SURVEILLANCE ......................................................................... 18 I.2.7 ALLIANCES WITH OTHER SECTORS................................................................... 18 I.3 THE DISTRIBUTION NETWORK................................................................................. 19 I.3.1 THE DOMINANCE OF CONGLOMERATES ............................................................ 19 I.3.2 PORTRAIT OF THE MAJOR CONGLOMERATES .................................................... 19 STHE U.S. MARKET ...................................................................................... 23 STHE CANADIAN MARKET.............................................................................. 24 STHE ASIA-PACIFIC MARKET ......................................................................... 25 I.3.3 ELECTRONIC TOURISM: A NEW DISTRIBUTION CHANNEL .................................... 26 STHE NORTH AMERICAN MARKET.................................................................. 27 STHE EUROPEAN MARKET ............................................................................ 28 SDEVELOPING REGIONS ............................................................................... 28 I.3.4 GLOBAL DISTRIBUTION SYSTEMS: THE PIONEERS OF ELECTRONIC DISTRIBUTION............................................................................................... 29 I.3.5 ALLIANCES, MERGERS AND ACQUISITIONS IN THE DISTRIBUTION NETWORK......... 30 SVERTICAL INTEGRATION: NECESSARY FOR PROFITABILITY............................. 30 STHE DOMINATION OF GERMANY AND THE UNITED KINGDOM .......................... 31 STHE RACE TO CONSOLIDATE CONTINUES...................................................... 31 I.4 THE ON-LINE TRAVEL SECTOR................................................................................ 33 I.4.1 OVERVIEW OF THE TOP PLAYERS IN ON-LINE DISTRIBUTION ............................... 33 STHE NORTH AMERICAN MARKET.................................................................. 33 STHE EUROPEAN MARKET ............................................................................ 34 I.4.2 NEW METHODS OF ELECTRONIC DISTRIBUTION ................................................. 34 S“CLICK-AND-MORTAR” AGENCIES................................................................. 34 SNAME-YOUR-PRICE SYSTEMS: NEW BUSINESS MODELS ................................ 35 I.4.3 VIRTUAL CONSOLIDATION................................................................................ 35 SAMERICAN DOMINATION .............................................................................. 37 I.4.4 THE AIRLINES AND ON-LINE TRAVEL DISTRIBUTION ............................................ 37 SORBITZ STIRS UP CONTROVERSY................................................................. 37 SHOTWIRE: DISCOUNT PORTAL ..................................................................... 38 SOPODO TAKES OFF..................................................................................... 38 SREDUCED COMMISSIONS ........................................................................... 38 I.4.5 THE HOTEL INDUSTRY IN THE ERA OF ON-LINE RESERVATIONS ........................... 39 I.4.6 ELECTRONIC PROCUREMENT: A NEW TYPE OF ALLIANCE................................... 40 Delivered by http://www.e-unwto.org Georgios Drakopoulos (307-99-294) Tuesday, March 01, 2011 8:32:21 AM I.5 THE HOTEL INDUSTRY............................................................................................ 41 I.5.1 A GUIDE TO THE VARIOUS TYPES OF HOTEL-RELATED ACTIVITIES....................... 41 I.5.2 REITS: ANOTHER WAY OF DOING BUSINESS...................................................... 41 I.5.3 LARGE INTERNATIONAL GROUPS: DOMINATED BY THE U.S................................ 42 I.5.4 THE TITLE OF “BIGGEST INDUSTRY PLAYER”: A DIFFICULT CHOICE ...................... 44 I.5.5 ALLIANCES, MERGERS AND ACQUISITIONS IN THE HOTEL INDUSTRY.................... 44 SHOTEL GROUPS, LARGE AND SMALL, GET BIGGER......................................... 44 SUNEXPECTED VERTICAL INTEGRATION ........................................................ 47 SCONSOLIDATION THROUGH MARKET GLOBALIZATION..................................... 47 SBIGGER GIANTS.........................................................................................