QUALITY AS a BASIS for TOURISM DESTINATION COMPETITIVENESS Book of Proceedings

www.sitcon.singidunum.ac.rs TOURISM CONFERENCE - 2016 SINGIDUNUM INTERNATIONAL

September 30, 2016

QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS The principal aim of SITCON 2016 conference is to provide a considerable scientific contribution in the domain of marketing and management regarding tourism destination competitiveness, placing QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS special emphasis on the quality aspect in tourism.

The conference provides an ideal platform for the exchange of ideas and dissemination of best practices among the scientists and experts from various fields (travel agencies, tour operators, hotel enterprises and other segments of accommodation offer, transportation companies and companies related to other complementary activities, as well as representatives of tourism organizations and the public sector) in relation to the SITCON 2016 themes.

QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Book of proceedings Book of proceedings

9 788679 126412

September 30, 2016 www.sitcon.singidunum.ac.rs

BOOK of proceedings

Singidunum University International Scientific Conference QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Belgrade September 30, 2016 www.sitcon.singidunum.ac.rs Scientific Committee

◆◆ Milovan Stanišić, Singidunum University, Serbia ◆◆ Alexandru Nedelea, Stefan cel Mare University of Suceava, Romania ◆◆ Mladen Veinović, Singidunum University, Serbia ◆◆ Alon Gelbman, Kinneret College on the Sea of Galilee, Israel ◆◆ Slobodan Unković, Singidunum University, Serbia ◆◆ Anya Diekmann, Université Libre de Bruxeless, Belgium ◆◆ Slobodan Čerović, Singidunum University, Serbia ◆◆ Aurora Pedro Bueno, University of Valencia, Spain ◆◆ Angelina Njeguš, Singidunum University, Serbia ◆◆ Biljana Crnjak Karanović, University of Split, Croatia ◆◆ Dragan Cvetković, Singidunum University, Serbia ◆◆ Dinu Vasile, Bucharest University of Economic Studies, Romania ◆◆ Endre Pap, Singidunum University, Serbia ◆◆ Harald Pechlaner, Catholic University of Eichstaett-Ingolstadt, Germany ◆◆ Goranka Knežević, Singidunum University, Serbia ◆◆ Irfan Arikan, IMC University of Applied Sciences Krems, Austria ◆◆ Jovan Popesku, Singidunum University Serbia ◆◆ Jasmina Gržinić, University of Pula, Croatia ◆◆ Milan Milosavljević, Singidunum University, Serbia ◆◆ Kerstin Wegener, Frankfurt University of Applied Sciences, Germany ◆◆ Milorad Stojić, Singidunum University, Serbia ◆◆ Larry Dwyer, University of New South Wales, Australia ◆◆ Miroslav Lutovac, Singidunum University, Serbia ◆◆ Lidija Petrić, University of Split, Croatia ◆◆ Nemanja Stanišić, Singidunum University, Serbia ◆◆ Magda Antonioli Corigliano, Bocconi University, Italy ◆◆ Olivera Nikolić, Singidunum University, Serbia ◆◆ Marjan Bojadjiev, University American College Skopje, Macedonia ◆◆ Mihalis Kavaratzis, University of Leicester, United Kingdom ◆◆ Radmila Živković, Singidunum University, Serbia ◆◆ Milenko Stanić, Synergy University, Bosnia and Herzegovina ◆◆ Svetlana Stanišić Stojić, Singidunum University, Serbia ◆◆ Nellie Swart, University of South Africa, South Africa ◆◆ Tijana Radojević, Singidunum University, Serbia ◆◆ Rade Ratković, Business and Tourism Faculty of Budva, Montenegro ◆◆ Verka Jovanović, Singidunum University, Serbia ◆◆ Rob Davidson, MICE Knowledge ◆◆ Vesna Spasić, Singidunum University, Serbia ◆◆ Silvana Đurašević, Mediterranean University, Montenegro ◆◆ Vladimir Džamić, Singidunum University, Serbia ◆◆ Stanislav Ivanov, International University College, Bulgaria ◆◆ Tadeja Jere Jakulin, University of Primorska, Slovenia

Organizing Committee

◆◆ Mladen Veinović, PhD ◆◆ Marko Šarac, PhD ◆◆ Vladimir Džamić, PhD ◆◆ Novak Njeguš, MSc ◆◆ Slobodan Čerović, PhD ◆◆ Miroslav Knežević, PhD ◆◆ Aleksandar Mihajlović, MSc ◆◆ Predrag Obradović, MSc ◆◆ Jovan Popesku, PhD ◆◆ Nikica Radović, PhD ◆◆ Ana Petrović, MSc ◆◆ Aleksandra Stojanović ◆◆ Danijel Pavlović, PhD ◆◆ Svetlana Stanišić Stojić, PhD ◆◆ Dušan Borovčanin, MSc ◆◆ Miloš Ličina ◆◆ Ivana Brdar, PhD ◆◆ Tijana Radojević, PhD ◆◆ Milan Tair, MSc

QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS Electronic version

Publisher: Singidunum University, 32 Danijelova Street, Belgrade Contact us: Editor-in-Chief: Milovan Stanišić, PhD Singidunum University Prepress: Novak Njeguš 32 Danijelova Street, Belgrade Design: Aleksandar Mihajlović Serbia Year: 2016 Phone: +381 11 3093220; +381 11 3093290 Circulation: 250 Fax: +381 11 3093294 Printed by: Singidunum University E-mail: [email protected] ISBN: 978-86-7912-641-2 Web: www.sitcon.singidunum.ac.rs

Copyright © 2016. All rights reserved. No part of this work covered by the copyright herein may be reproduced, transmitted, stored or used in any form or by any means graphic, electronic, or mechanical, including but not limited to photocopying, recording, scanning, digitizing, taping, Web distribution, information networks, or information storage and retrieval systems, without the prior written permission of the publisher. about conference sitCON 2016

It is our great pleasure to present the proceedings of the second international scientific conference in the field of tourism and hospitality - SITCON 2016 (Singidunum International Tourism Conference), held on September 30, 2016 at Singidunum University in Belgrade. The principal aim of SITCON 2016 was to provide a considerable scientific contribution in the domain of marketing and management regarding tourism destination competitiveness, placing special emphasis on the quality aspect in tourism. The conference is intended to further broaden the knowledge necessary for better understanding of the key concepts related to the area of destination competitiveness, particularly in Serbia. Therefore, it is of vital importance to study and measure quality at all levels of tourism activity. What makes this event so significant is the fact that it devotes considerable attention to all relevant aspects of tourism destination competitiveness, within both the private and public sector, in order to achieve sustainable development across all sectors of the tourism industry. The conference provided an ideal platform for the exchange of ideas and dissemination of best practices among the scientists and experts from various fields (travel agencies, tour operators, hotel enterprises and other segments of accommodation offer, transportation companies and companies related to other complementary activities, as well as representatives of tourism organizations and the public sector) in relation to the SITCON 2016 themes. The speakers at the plenary session were: ◆◆ Prof. Milovan Stanišić, PhD, President of Singidunum University ◆◆ Mr. Rasim Ljajić, Deputy Prime Minister of the Government of the Republic of Serbia and Minister of Trade, Tourism and Telecommunications ◆◆ Mrs. Marija Labović, Acting Director of the National Tourism Organisation of Serbia ◆◆ Prof. Slobodan Unković, PhD, Professor emeritus at Singidunum University ◆◆ Prof. Jovan Popesku, PhD, Singidunum University, moderator The keynote speakers at the conference were: ◆◆ Prof. Harald Pechlaner, PhD, President of AIEST (International Association of Scientific Experts in Tourism) and a professor at Catholic University of Eichstaett-Inglostadt, Germany ◆◆ Prof. Rob Davidson, PhD, Managing director of MICE Knowledge, United Kingdom ◆◆ Prof. Nemanja Stanišić, PhD, Full Professor at Singidunum University, Serbia Our extensive team of reviewers did a successful job of handling the entire review process. The Scientific Com- mittee comprised 20 reputable professors from Serbia and 22 professors from 19 renowned foreign universities: (Australia 1; Austria: 1; Belgium 1; Bosnia and Herzegovina 1; Bulgaria 1; Croatia 3; Germany 2; Great Britain 2; Israel 1, Italy: 1; Macedonia 1; Montenegro 2; Romania 2; Slovenia: 1; South Africa: 1; Spain 1). The overall statistics on the conference are the following: ◆◆ The total number of submitted papers- abstracts: 55 ◆◆ The total number of accepted papers: 45 ◆◆ The total number of rejected papers: 10 ◆◆ The total number of invited papers: 3 III A total of 125 authors from 17 different countries have submitted papers to SITCON-2016 conference (all papers and abstracts submitted, including invited papers). The list of countries the authors come from (in alphabetical order): 1. Azerbaijan 7. Germany 13. Nigeria 2. Bosnia and Herzegovina 8. Great Britain 14. Poland 3. Bulgaria 9. Israel 15. Serbia 4. the Czech Republic 10. Italy 16. Slovenia 5. Croatia 11. Macedonia 17. Turkey 6. Georgia 12. Montenegro

All accepted papers fully comply with conference criteria and are published in the Conference Proceedings and made publicly available within the conference website. Each paper is assigned its DOI number, reference on Google Scholar, and Conference Proceedings have an ISBN number. Three papers have been accepted for publication in the European Journal of Applied Economics issued by Singidunum University. All information disclosed and a large number of high-quality submissions and reputable guests and tourism experts from the country and abroad, point to the importance of SITCON 2016 as an international scientific conference in the field of tourism and hospitality, and show that the conference has been well-accepted and highly-valued within the academic community in Serbia and abroad. Esteemed readers, on behalf of the Scientific and Organizing Committee of SITCON 2016, we would like to express our deepest gratitude and appreciation to all participants for their valuable contributions. We sincerely hope that you shall take part in our future conferences held at Singidunum University, with a new theme and innovative papers.

Belgrade, November 2016. Organizing Committee of the international scientific conference SITCON 2016

IV Contents  SitCON 2016

Contents

Invited Papers

Quality as a Basis for Tourism Destination Competitiveness 1 Harald Pechlaner

Harnessing local expertise and knowledge: 2 - 6 A new concept in business tourism destination marketing Rob Davidson

Recent trends in quantitative research 7 - 10 in the field of tourism and hospitality Nemanja Stanišić

Key issues on Tourism Destination Competitiveness

Anatomy of sustainable tourism development: 11 - 16 A case study of the city of Split Lidija Petrić, Biljana Crnjak-Karanović

The analysis of the local population’s attitudes towards the effects 17 - 26 of tourism development: A case study of Amasya Serif Baldiran

Understanding digital consumers in tourism 27 - 32 Radmila Živković, Ivana Brdar, Jelena Gajić, Jelena Stanković

Tourism as a puzzle in the process of improvement of creative economy 33 - 36 Nikica Radović, Danica Čigoja Piper

Technological development and sharing economies: 37 - 42 implications on tourism destinations Miloš Ničić, Sanja Iguman

The role of user-generated content in increasing 43 - 48 tourism destination competitiveness Sonja Oklobdžija

V Contents  SitCON 2016

Competitiveness of Vojvodina as a tourism destination: The analysis of 49 - 58 selected travel & tourism competitiveness index indicators Živana Krejić, Katarina Plećić

Tourist experience as the basis for destination competitiveness: 59 - 63 A case study of Ohrid Simonida Vilić, Tatjana Dujaković

Improving the competitiveness of tourism offer of Vojvodina through 64 - 68 fostering cooperation in cross-border regions Verica Bulović, Marija Najdić

Influence of national mentality on tourism destination competitiveness: 69 - 74 A case study of Azerbaijan and Georgia Larisa Korganashvili, Natavan Mammadova

Quality in Tourism and Hospitality

Integrated quality management for MICE destinations 75 - 82 Renata Pindžo, Igor Kovačević, Bojan Zečević

Can we rely on Internet distribution systems’ rating? 83 - 86 A case study of Booking.com and HRS.com Slobodan Čerović, Miroslav Knežević, Dušan Borovčanin, Vladimir Džamić

Social CRM in the airline industry 87 - 91 Jelena Gajić, Radmila Živković, Jelena Stanković, Ivana Brdar

Information retrieval evaluation for tourism related 92 - 100 social media content Angelina Njeguš, Verka Jovanović, Marina Marjanović-Jakovljević

Enhancing the quality of tourism experience through destination 101 - 107 interpretation as an aspect of competitiveness of protected tourism areas Ivana Damnjanović

Measuring service quality in hospitality on the basis of user perceptions: 108 - 115 A case study of Palić Dragan Vojinović, Ljubiša Vladušić, Milena Mirković

Exploring the motives to visit Belgrade using AHP method 116 - 121 Sanja Božić, Tamara Višnić, Milan Ivkov, Miroslav D. Vujičić

The role of technical measurements of service quality in tourism: 122 - 129 Smart sensor wellbeing hub Tamara Jakovljević

Visa application in travel agencies on behalf of the client 130 - 134 Dragana Jovanović Kuprešanin, Gabrijela Lilić

The role of insurance in organisation of tourist travel 135 - 142 Aleksandra Stojaković

VI Contents  SitCON 2016

Resources as a Basis for Achieving Quality and Destination Competitiveness

Human resources as a factor of competitiveness and quality 143 - 149 in the hospitality industry Iva Bulatović, Silvana Đurašević, Ana Stranjančević

Gastronomy and tourism destination competitiveness 150 - 154 Slavka Drašković

The role of cultural and historical heritage in tourism development 155 - 160 of the Maleshevo Mountains Ace Milenkovski, Sashko Gramatnikovski, Dejan Nakovski

The analysis of tourism development of the natural park Canyon Matka 161 - 168 Meri Nickova, Andreja Mackic, Goran Apostolovski

The impact of the names of dishes on the guest’s choice of restaurant food 169 - 173 Dragan Tešanović, Banjac Maja, Bojana Kalenjuk, Goran Radivojević

Human resources management in the hotel industry: 174 - 180 The analysis of current practices in Serbia Svetozar Krstić

Budgeting process in tourism companies for the purpose 181 - 186 of improving the quality of tourism products Danica Vuković

Destination branding: A case study of national parks in Montenegro 187 - 191 Marija Janković, Milena Bokić

Quality and Competitiveness in Tourism and Hospitality Industry

Key performance indicators in the hotel industry 192 - 198 Ljiljana Kosar, Slobodan Rašeta, Nikolina Kosar

Service orientation as a basis for quality services and competitiveness 199 - 202 in hotel industry Milan Ivkov, Ivana Blešić, Sanja Božić, Lukrecija Đeri

Service quality as travel agencies business improvement factor 203 - 208 Dragana Ilić, Lukrecija Djeri, Predrag Stamenković, Snežana Milićević

Market trends for tour operators and travel agencies booking 209 - 214 channels - Preferences of young people in Serbia Danijel Pavlović, Vesna Spasić, Nenad Stanić

Macedonian tourism insight through the analysis of stocks returns 215 - 222 of quoted tourism companies at MSE Zoran Ivanovski, Valentina Angelkoska, Zoran Narasanov

VII Contents  SitCON 2016

Correlation between quality rating systems and profitability 223 - 229 of Serbian hotels Slavko Alčaković, Vule Mizdraković, Vladimir Džamić

Hotel image as an important prerequisite for creating 230 - 234 a competitive advantage Daliborka Blazeska, Angela Milenkovska, Marina Stojmirova

Electronic meal experience: The analysis of best restaurants in Novi Sad 235 - 242 Snježana Gagić, Ana Jovičić-Vuković, Bojana Kalenjuk, Marko D. Petrović

Hostel categorization as an aspect of improving market power 243 - 249 of domestic accommodation facilities Jovan Vukotić

Hotel performance measurement: Literature review 250 - 257 Mladen Mitrović, Sandra Janković, Gordana Ivankovič

Abstract preview

Serbia’s competitive position in the regional tourism destination market 258 Milivoj Teodorović, Jovan Popesku

Festivals as an important determinant of destination competitiveness: 259 A case study of Serbia Vanja Dragićević, Uglješa Stankov, Tanja Armenski

The analysis of Serbian customers satisfaction with 260 e-services quality dimensions of lodging e-intermediaries Nikola Mihajlović, Jovan Popesku

The study of social responsibility and sustainable development 261 in tourism organizations in Serbia Sanja Jakovljević, Radmila Živković

Destinations of mountain tourism in XXI century: 262 Attractiveness and competitiveness based on selected areas Marek Żołądek

VIII SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Invited Papers / Abstract preview

Quality as a Basis for Tourism Destination Competitiveness

Harald Pechlaner Abstract: Understanding the basic limitations of destination management is fundamental to the achievement of quality and destination competitiveness. In order to Chair of Tourism Department, attain quality goals and improve destination competitiveness position, it is Catholic University of Eichstaett-Ingolstadt, necessary to identify the differences and limitations of destination plans by Germany overcoming the gap between the destination original plans and real market circumstances. This refers to the product creation, with all its quality, that has to be market-oriented. In this context, special importance is given to the well-planned organizational structuring of destinations. Limitations of destination quality and competitiveness achievement also refer to the process of managing a destination in the context of creating a fundamental destination product bearing in mind that destination management appears as a complex task. Therefore, this paper identifies and distinguishes between different approaches in the analysis and creation of destination products with special emphasis on cooperation, innovation and quality. It further highlights destination management as being a “complexity-reduction-task”, a new quality philosophy, and points to the importance of tourism destination as a value chain and quality achievement in all its parts. In line with this, the paper also points to the promotion of the cross-linking quality, an integrated concept of Correspondence: mobility, activity and experience. Harald Pechlaner e-mail: Keywords: [email protected] quality, destination management, tourism destination competitiveness.

1 Sitcon 2016 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Invited Papers

Harnessing local expertise and knowledge: A new concept in business tourism destination marketing

Rob Davidson Business Tourism

MICE Knowledge, By comparison with leisure tourism, business tourism has been rela- London, Great Britain tively under-researched in academia, despite considerable economic benefits it can bring to destinations. Holloway and Humphreys (2016) note that business tourism – which is principally, travel for commercial, professional and work-related purposes – represents the major non-leisure form of tourism, and business tourists are widely recognised as the highest-spending category of travellers. According to the same source, business tourism takes four principal forms: travel for the purpose of at- tending meetings; incentive travel; travel to attend an exhibition or trade fair; and individual business travel. The meetings sector represents by far the largest and most proﬁtable element of business tourism. To take just one type of meeting - conferences of international associations - the International Congress and Convention Association, reported a record number of 12,076 rotating international association meetings taking place in 2015, 571 additional meetings compared to 2014 (ICCA, 2016).

The Destination Marketing System for Business Tourism

Due to the potential economic benefits yielded by business tourism, competition between destinations seeking to host such events is intense, and among the key stakeholders in the struggle to win meetings of all sizes are the destination marketing organisations (DMOs) known as Conven- tion Bureaus or Convention and Visitor Bureaus. In the realm of destination marketing, Convention Bureaus are the key information brokers and information disseminators for the meetings industry. One of their critical missions is to brand and promote their destination as a desirable location for the hosting of meetings (Gartrell, 1994; Kim, Morrison, & Mills, 2004). The earliest Convention Bureaus were created in North America, with the first being established in Detroit in 1896. Named the “Detroit Convention Correspondence: and Businessmen’s League”, its aim was “to organise a formal and organ- Rob Davidson ized promotion of Detroit as a desirable convention destination” (Ford & e-mail: Peeper, 2007, p. 3). In the twentieth and twenty-first centuries, the num- [email protected] ber of Convention Bureaus has grown exponentially, as cities all over the 2 Sitcon 2016 Doi: 10.15308/Sitcon-2016-2-6 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS world have created such entities to market themselves selection but also contract negotiation, registration, event as destinations for business and leisure. Exact numbers promotion and marketing, invitations, transportation are difficult to estimate, but the world’s largest associa- planning, speaker selection and gift selection (Beaulieu tion of DMOs, Destination Marketing Association In- & Love, 2004; Toh, DeKay, & Yates, 2005). However, it ternational, has members from over 600 DMOs in over is their role as the professionals who choose or influence 20 countries. Cvent, a company specialising in event the choice of the destinations for the events they organ- management technology, publishes a comprehensive ise that makes them a focus of attention for Convention list of Convention Bureaus based in Europe, the Europe Bureaus seeking to win business tourism for their cities. Convention and Visitor Bureau (CVB) Directory, which Even in the USA, where only parts of Convention and currently includes over 300 such organisations with re- Visitor Bureaus’ marketing efforts are focused on win- sponsibility for marketing their city, region or country ning business tourism, meeting planners are still consid- as business tourism destinations (Cvent, 2012). In North ered to be one of their main target markets. In a recent America, according to Gartrell (1994), the term Conven- survey, approximately 40% of US Convention and Visitor tion and Visitor Bureaus generally refers to DMOs with Bureau respondents counted meeting planners as their responsibility for attracting both leisure and business main target market (Kim, Lehto, & Kline, 2010). It is due visitors to the cities they represent. Their role is to de- to the considerable power of meeting planners that much velop, promote and maintain their image as an attractive of the business tourism academic literature has focused destination, not only targeting visitors but also targeting on their key role in site selection and the complexity destination events, meetings and conventions. Accord- of the site decision-making process (Beaulieu & Love, ing to Vallee (2008, p. 162), Convention and Visitor Bu- 2004; Crouch & Ritchie, 1997; Hu & Hiemstra, 1996). reaus most commonly achieve their goals by working to: The conference site decision process differs significantly (1) solicit, qualify and confirm groups to hold meetings, to the destination decision process for individual or fam- conventions and trade shows in the area it represents; ily holidays, as it reflects the fundamental features of the (2) assist meeting groups that have confirmed through purchasing processes of business markets in general, attendance building and convention servicing; (3) man- consisting of fewer, but larger, customers than consumer age the destination brand through awareness building markets and being involved in purchases of considerably and customer relationship management; (4) market to greater value, having complex economic, technical and leisure travel trade and individual travellers through financial considerations (Vitale, Giglierano, & Pfoertsch, targeted promotional and sales activities; (5) facilitate 2011). This form of organisational buying typically in- relationships between meeting manager and travel trade volves individuals of varying levels of influence in final buyers and sellers, with sellers generally composed of decisions; but the meeting planner acts as a gatekeeper of local businesses offering products and services and (6) information that is needed by the decision-makers (Lewis service visitors, including convention delegates, in the & Chambers, 2000) and therefore plays a pivotal role. destination to encourage them to stay longer and see In order to influence the decisions of meeting plan- more of the area. While in North America, Convention ners in their favour, Convention Bureaus use a broad Bureaus work to attract both leisure and business visi- range of marketing communications tools, including tors, in Europe they are almost exclusively involved in customer relationship management, direct marketing, winning and servicing business tourism, such as confer- publications, public relations, attendance at meetings ences and incentive trips, for the destinations they repre- industry trade shows and the hosting of familiarisation sent. In order to do so, they must focus their marketing trips – visits to a destination offered to potential buyers, efforts on gaining the attention and interest of profes- designed to acquaint them with specific local facilities sional meeting planners. and services and to stimulate the booking of a business As intermediaries between conference attendees and tourism event in that city (Davidson & Rogers, 2016). conference sites (destinations and venues), meeting plan- The use of such tools has, in recent years, been sup- ners play an important role in the meetings industry by plemented and modified by the advent of Web 2.0, as a selecting sites, organising meetings and coordinating ser- rapidly expanding number of organisations have begun vices and events (Casanova, Kim, & Morrison, 2005). The to leverage the potential of this technology in their mar- wide range of their responsibilities includes not only site keting efforts (Davidson and Keup, 2014). 3 Invited Papers SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Using local expertise and knowledge nology, etc. and then create collections of ambassador in business tourism destination marketing companies around those specific knowledge industries, to attract conferences in those fields. The GCB now posi- A new approach to marketing destinations for busi- tions its brand message with the slogan: “Germany. Suc- ness tourism is emerging, as a growing number of Con- cess Through Expertise”, and the strategy appears to be vention Bureaus are beginning to understand that, in working: 25.6 million international meeting attendees addition to important factors such as price, accessibility visited Germany in 2014, demonstrating an increase of and having the appropriate infrastructure for the host- 54% over the 16.6 million arrivals in pre-recession 2007 ing of meetings, the existence of local economic and sci- (GCB, 2015). entific expertise can deliver an important competitive Many other European DMOs have joined the trend advantage when attempting to attract business tour- of harnessing local expertise and industries for the pur- ism. Meeting planners are increasingly attracted by the pose of winning conferences in those sectors. For exam- idea that local experts can be invited as speakers at their ple, in London, the marketing campaigns of London & conferences; local specialists working in the field of the Partners emphasise the city’s strengths in life sciences, conference topic can boost delegate numbers; and local the creative industries and financial services. The Rot- research centres, laboratories or factories can provide terdam Partners Tourism Board & Convention Bureau, interesting sites for conference excursions. For exam- as part of the newly established Rotterdam Partners al- ple, the Convention Bureau of Hamburg, a city with a liance, which also includes the Rotterdam Economic strong presence of companies operating in the logistics Council and the Rotterdam Knowledge Ambassadors and transportation industry, now collaborates with ‘des- network, is another example of success. It focuses on tination ambassadors’ working in those companies in business tourism related to Rotterdam’s key sectors of order to sell the destination to meeting planners who are agriculture and food, chemicals, the creative industries, seeking destinations for large corporate and association high tech systems and materials, life sciences and health, events in the global transportation industry. An early logistics and water. To give an example of success, as a success of the Hamburg Convention Bureau, working direct result of this strategy, the city has won the right in partnership with local transportation companies, was to host several high-profile conferences related to water: the successful securing of the IATA World Passenger The 2nd European Conference on Flood Risk Manage- Symposium in October 2015 - because the city has for- ment – 2012; the Ballast Water Management Conference mally developed a cluster of mobility and logistics com- – 2013; Europort – the exhibition for maritime technol- panies based in the region around the port city (DMAI, ogy – 2013; Deltas in Times of Climate Change – 2014; 2016). The European Conference and Exhibition on Inland Consequently, following the rise in the overall qual- Terminals – 2014; and the International Conference on ity of meetings infrastructure throughout the world, Logistics and Maritime Systems – 2014. more and more Convention Bureaus are differentiat- DMAI (2016) quotes the Account Manager of Busi- ing their destinations by developing strategic alliances ness Events at Rotterdam Partners as saying: “Now we’re with their local knowledge industries and economic trying to focus more on leveraging Rotterdam’s network development agencies, to promote the city or region of academic and corporate colleagues to reach our cli- as a destination for meetings and conferences held by ents abroad to deliver a better convention experience. So those industries. we are basically professionalising the experience more According to DMAI (2016), this idea of Convention because it is a very competitive market in Europe”. Bureaus clustering their local knowledge professionals in It is clear that this new concept in destination mar- a region, and packaging them as ambassadors to attract keting depends upon DMOs taking a strong partner- specific industry conferences, was first formulated by ship approach to winning business tourism for their cit- DMOs such as the German Convention Bureau (GCB) ies, rather than working in isolation. Most commonly, over the last five years. During that time, individual Ger- Convention Bureaus have begun to work with their man cities have begun to define their strongest sectors— colleagues in Economic Development, Inward Invest- such as information technology, finance, transportation, ment and Education departments in order to reach out medicine, bioscience, green energy, robotics, nanotech- to local companies, organisations and research centres. 4 Invited Papers SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

An outstanding example of this network approach may Casanova, M. B., Kim, D. Y., & Morrison, A. M. (2005). be seen in the case of Manchester where, in early 2015, The relationships of meeting planners’ proﬁles with the newly formed Manchester Growth Company in- usage and attitudes toward the use of technology. corporated the consumer-facing Visit Manchester and Journal of Convention and Event Tourism,7(3), trade-specific Marketing Manchester DMOs with the 19–43. city’s business and economic development organisa- Crouch, G. I., & Ritchie, J. R. B. (1997). Convention site tions to more effectively exploit the potential to attract selection research. Journal of Convention & Exhibi- new conferences revolving around the city’s expertise tion Management, 1(1), 49–69. in science. As a result, Manchester can now bring an Cvent. (2012). Europe CVB Directory. Retrieved from exponentially larger number of potential partnerships http://www.cvent.com/rfp/europe-cvb-directory- to the table when showcasing the city during negotia- 18129d1549184b9a8117deee791ae01a.aspx tions with meeting planners (ibid.). Davidson, R. and Keup, M (2014) The Use of Web 2.0 as a Marketing Tool by European Convention Bureaux. Conclusion Scandinavian Journal of Hospitality and Tourism, 14(3), 234-254. In an increasingly competitive market environment, the harnessing of cities’ local industrial and research Davidson, R., & Rogers, T. (2016). Marketing destinations and venues for conferences, conventions and business expertise represents a major shift from simply market- events. Oxford: Butterworth-Heinemann. ing the destination’s meetings infrastructure hardware to promoting its intellectual software as well. This new DMAI (2016) The Evolving Role of DMOs in a Shifting approach is a response to the realisation of the growing Marketplace. Washington DC. Destination Market- ing Association International. importance that meeting planners place on partnering their business tourism events with established compa- Ford, R. C., & Peeper, W. C. (2007). The past as prologue: nies and research organisations in their sector. Predicting the future of the convention and visitor bureau industry on the basis of its history. Tourism It is a trend that looks set to continue. To return to Management, 28(4), 1104–1114. the case of Germany, the German Convention Bureau Gartrell, R. (1994). Destination marketing for convention publishes an annual Meeting & Event Barometer, a key and visitor bureaus. Dubuque, IA: Kendall/Hunt. study that examines both the conference and events GCB (2015) Meeting & Event Barometer report. Frank- sector in that country. The latest edition clearly shows furt. German Convention Bureau. that, for meeting planners, local expertise in the sector is becoming a critical factor to be taken into account GCB (2016) Meeting & Event Barometer report. Frank- furt. German Convention Bureau. in the choice of destination for their events. 73.7% of the surveyed organisers believed that partnering their Holloway, J. C. and Humphreys, C. (2016) The Business events with local companies and research organisations of Tourism. Harlow: Pearson Education in their sector was becoming increasingly important. Hu, C., & Hiemstra, S. J. (1996). Hybrid conjoint analysis DMOs in Germany are increasingly geared to this ap- as a research technique to measure meeting plan- proach. Accordingly, in 2012, one third of them had ners’ preferences in hotel selection. Journal of Trav- el Research, 35(2), 62–69. integrated regional fields of competence into their marketing campaigns, while these figures rose to 44.4% in ICCA (2016) 2015 International Statistics Report. Am- 2015 (GCB, 2016). This means that DMOs’ co-opera- sterdam. International Congress and Convention tion with established scientific and business institutions Association. in the sector has increased substantially in recent years Kim, D. Y., Lehto, X. Y., & Kline, S. F. (2010). Organi- in Germany and elsewhere. sational channel discrepancies between CVBs and meeting planners in the USA. International Journal References of Tourism Research, 12(2), 103–115. Kim, D. Y., Morrison, A. M., & Mills, J. E. (2004). Tiers or Beaulieu, A. F., & Love, C. (2004). Characteristics of a tears? An evaluation of the Web-based marketing meeting planner: Attributes of an emerging proof major city convention centers in the U.S. Journal fession. Journal of Convention and Event Tourism, of Convention and Exhibition Management, 5(2), 6(4), 95–124. 25–49. 5 Invited Papers SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Lewis, R. C., & Chambers, R. E. (2000). Marketing leader- C. Ramsborg, B. Miller, D. Breiter, B. J. Reed, & A. ship in hospitality. New York, NY: Wiley. Rushing (Eds.), Professional meeting management, Toh, R., DeKay, F., & Yates, B. (2005). Independent meet- comprehensive strategies for meetings, conventions ing planners: Roles, compensation, and potential and events (pp. 161–178). Chicago, IL: Kendall/ conﬂicts. Cornell Hotel & Restaurant Administra- Hunt. tion Quarterly, 46(4), 431–443. Vitale, R., Giglierano, J., & Pfoertsch, W. (2011). Busi- Vallee, P. (2008). Convention and visitors bureaus: Part- ness-to-Business Marketing. Upper Saddle River, NJ: nering with meeting managers for success. In G. Prentice Hall.

6 Invited Papers SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Invited Papers

Recent trends in quantitative research in the field of tourism and hospitality

Nemanja Stanišić Abstract: Quantitative research in the field of tourism and hospitality is undergoing an important transformative phase, with crowdsourced data being the major Singidunum University, driving force. The author discusses several key aspects of the research process Belgrade, Serbia likely to evolve during this phase and related implications for researchers.

Keywords: tourism, hospitality, quantitative research, multilevel modelling, data mining.

INTRODUCTION

The last decade in the tourism industry is characterized by the emergence and rapid proliferation of globally accessible Internet services, which have redefined the way customers select properties, make reservations and payments, and share their impressions about the services received. The exponentially increasing amount of data available dues to these services has also drawn the attention of the research community, which increasingly uses these data for research purposes. In the following sections, the author shall briefly discuss the implications of such development for several key aspects of quantitative research, namely: 1) data collection; 2) data characteristics; 3) statistical tools being employed; 4) type of research questions being addressed, and 5) research reproducibility and extensibility.

Data Collection

Whenever applicable, researchers are replacing the data sets collected through questionnaires and interviews by those collected from online services, with Booking.com and TripAdvisor.com being the most prominent sources. Besides being less costly and more readily available, these data sets are not nearly as limiting with regard to the obtainable sample size. Sam- ples of thousands, or even millions, of observations are becoming com- monplace in the literature. Such large samples endow researchers with enough statistical power to examine even the subtlest causal effects that Correspondence: may be of theoretical interest (Radojevic, Stanisic, Stanic, & Sarac, 2014). Nemanja Stanišić Still, researchers have to be mindful of the fact that these data (more often e-mail: than not) have different statistical properties than those collected through [email protected] traditional surveys. 7 Sitcon 2016 Doi: 10.15308/Sitcon-2016-7-10 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Data Characteristics a) It accounts for the structures and hierarchical relationships present in the data. Owing to their typically wide spatial and temporal b) It allows partitioning of the total variance in the coverage, online data have characteristics of panel data. values of the dependent variable into between- Specifically, customer reviews (or ratings or comments) and within-unit components, which may be par- are provided over a certain period of time, requiring ticularly interesting from a theoretical perspec- that the temporal trend be accounted for. Also, the facts tive. that the reviews pertain to more than one property and c) It allows the inclusion of level-specific explana- that each reviewer is allowed to provide more than one tory variables (such as destination- or nationality- review impose the presence of property and reviewer- specific variables) without committing eco-logical specific effects, which also need to be controlled for. It fallacy. is also likely that samples include properties from mul- d) It allows for the fact that the examined effects tiple destinations and reviewers from different coun- might not be identical across units (e.g. proper- tries. If so, these classifications need to be accounted for ties, destinations, reviewers, nationalities) and as well, as they have been shown (Bulchand-Gidumal, even possibly correlated with the unit-specific ef- Melián-González, & González Lopez-Valcarcel, 2013; fects. Kozak, 2001; Liu, Teichert, Rossi, Li, & Hu, 2017) to be While most of the listed properties can be attained by capable of exerting unique (although less prominent) modifying classical (single-level) statistical data mining effects on the valence of customer reviews. Moreover, or machine learning tools, within the multilevel mode- as each property can be located in only one destination, ling framework, they are implemented in an unprece- and each reviewer can be of only one nationality, there dentedly systematic way. The application of mixed linear is a hierarchical structure to these classifications. Tech- models on empirical data collected from TripAdvisor nically, hotels are nested within the destinations while has been demonstrated by Radojevic, Stanisic, and reviewers are nested within their nationalities. The pres- Stanic (2015a, 2015b, 2017). Other equally prospecti- ence of structures and hierarchical relationships in on- ve techniques belonging to the same multilevel family line data will ultimately force researchers to adopt sta- include multilevel structural equation modeling (Meh- tistical tools capable of accounting for these properties. ta, 2013) and Bayesian multilevel modeling (Bürkner, 2016). Clearly, the advantages of using multilevel fra- Statistical Tools meworks are not limited to correcting for the bias that would otherwise be introduced, as they also allow researchers to tackle complex, multilevel questions that The initial reaction to the abundance of data was the were previously beyond reach. adoption of data mining and machine learning techniques, which resulted in numerous inspiring research Research Questions papers (Phillips, Zigan, Santos Silva, & Schegg, 2015; Xi- ang, Schwartz, Gerdes, & Uysal, 2015). However, the ca- To promote the use of the multilevel framework, pability of these tools to fully address complex research we offer a few examples of prospective research ques- questions and contribute to the existing body of theo- tions that could be easily addressed within the multilevel retical knowledge is limited. While being highly efficient framework: in detecting patterns and selecting a subset of relevant explanatory factors, these tools typically (although cer- a) Are there significant differences between the av- tain exceptions do exist) do not prompt the researcher erage rating scores across the destinations? (al- to either define the structures present in the data or to low the intercepts to vary across the destinations) include any prior information that might be relevant for b) Does the importance (indicating the reliability) the research problem at any point of the research proof star classification vary across the destinations? cess. Disregarding these important pieces of information (allow the slopes for the star classification vari- results in suboptimal performance of the effect estima- able to vary across the destinations) tion, including biased estimates. Furthermore, these c) Do the hotels located in destinations that have tools typically stay opaque with regard to the underly- implemented more reliable star classification sys- ing causal mechanisms (the “black box” effect). In this tems get higher ratings on average? (examine the regard, a multilevel modeling framework seems to be the correlation between the random intercepts and next step forward due to some important advantages: the random slopes) 8 Invited Papers SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

d) Can the differences in reliability of the star classi- search purposes. The main points stressed in the discus- fication systems implemented in the destinations sion are summarized in Table 1. be explained by their respective cultural characteristics (e.g., uncertainty avoidance)? (cross-level Table 1. Summary of the key differences between classic interaction between the cultural dimension vari- and modern approaches to quantitative analysis ables and star classification variable) While the first question can be tackled within sin- The past The future gle-level statistical techniques (ANCOVA), the latter Sources of three can be tackled exclusively within the multilevel Traditional Big data empirical surveys (crowdsourced) modeling framework. These and many more interest- data ing research questions can be tackled by extending the multilevel research framework presented by Radojevic Large samples with complex et al. (2017). This brings us to another major recent de- Small, simply structures Data char- velopment, which is the increased implementation of structured (repeated acteristics the concept of reproducible and extensible research. samples observations and hierarchical structures) Research Reproducibility Single level and Extensibility Multilevel models: OLS models: multilevel regression, (M) Statistical regressions, AN(C)OVA, The concept of reproducible research requires that tools Bayesian structural “researchers make code and data available to others so multilevel models, equation multilevel SEM that the data can be analyzed in a similar manner as modeling (SEM) in the original publication” (Stodden, Leisch, & Peng, Type of Complex, 2014). While the key benefit of this practice is verifi- Simple, single- research multilevel level questions able and, hence, more credible research results, it also questions questions allows researchers to reuse data sets and program code, Research cannot Research can be avoiding redundancy in efforts related to the collection Research be reproduced, easily reproduced, and cleaning of data, and even some parts of statisti- reproduc- modified, or built modified, and ibility cal modeling. This is particularly important because the upon built upon extensive geographic coverage of online data sets makes them interesting and relevant for researchers around the world. Our recent research (Radojevic et al., 2017) The trends that are likely to prevail in the near future has been made completely reproducible, and both the will, besides the above described procedural aspects, af- data set1 and the complete R code used for the analysis fect the skills of quantitative researchers in the field of will be made publicly available2 as soon as the article tourism and hospitality. In addition to advancing theo- is published. We encourage researchers to extend and retical knowledge and developing creativity, researchers build upon the existing multilevel platform or use the will unavoidably need to learn how to become data sci- data set in even more creative ways. entists in order to remain vanguard in the near future.

Conclusions References

The author discusses several key aspects of quantita- Bulchand-Gidumal, J., Melián-González, S., & González tive research that are likely to evolve in the near future Lopez-Valcarcel, B. (2013). A social media analy- as a result of the increased use of online data for re- sis of the contribution of destinations to client 1 The data set includes 3,488,473 customer reviews provided by satisfaction with hotels. International Journal of 2,233,671 unique, registered TripAdvisor users of 210 different nationalities related to 13,410 hotels located in 80 capital cities Hospitality Management, 35, 44-47. doi:10.1016/j. around the globe. It also includes a comprehensive list of at- ijhm.2013.05.003 tributes of all the reviewed hotels, each reviewer’s TripAdvisor Bürkner, P. C. (2016). brms: An R Package for Bayesian rank and nationality, the review-specific type of travel, and the Multilevel Models using Stan. Journal of Statistical date of the review (between August 31, 2002, and May 15, 2015) 2 Through the Mendeley Data service (Radojevic, Stanisic, & Stanic, Software, in press. Retrieved from https://cran.r- 2016) project.org/web/packages/brms/vignettes/brms.pdf 9 Invited Papers SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Kozak, M. (2001). Comparative assessment of tourist sat- Radojevic, T., Stanisic, N., & Stanic, N. (2016). Inside the isfaction with destinations across two nationalities. Rating Scores: A Multilevel Analysis of the Factors Tourism Management, 22(4), 391-401. doi:10.1016/ Influencing Customer Satisfaction in the Hotel In- S0261-5177(00)00064-9 dustry. Data set, Mendeley Data, v1. doi:10.17632/ Liu, Y., Teichert, T., Rossi, M., Li, H., & Hu, F. (2017). Big kwsrxshf9x.1 data for big insights: Investigating language-specific Radojevic, T., Stanisic, N., & Stanic, N. (2017). Inside the drivers of hotel satisfaction with 412,784 user-gen- Rating Scores: A Multilevel Analysis of the Factors erated reviews. Tourism Management, 59, 554-563. Influencing Customer Satisfaction in the Hotel In- doi:10.1016/j.tourman.2016.08.012 dustry. Cornell Hospitality Quarterly, in press. Mehta, P. D. (2013). Applied Quantitative Analysis in Radojevic, T., Stanisic, N., Stanic, N., & Sarac, M. (2014). Education and the Social Sciences. In Y. Petscher, C. Measuring customer satisfaction in the hospital- Schatschneider, & D. L. Compton (Eds.), Applied ity industry: an empirical study of the hotels in the Quantitative Analysis in Education and the Social capital cities of Europe. In Proceedings of the 1st In- Sciences (p. 329). Routledge. Retrieved from http:// ternational Scientific Conference - Sinteza 2014 (pp. books.google.com/books?hl=en&lr=&id=ZzBYKY 788-795). Belgrade, Serbia: Singidunum University. ZPNBgC&pgis=1 doi:10.15308/sinteza-2014-788-795 Phillips, P., Zigan, K., Santos Silva, M. M., & Schegg, R. Stodden, V., Leisch, F., & Peng, R. D. (2014). Implement- (2015). The interactive effects of online reviews on ing reproducible research. Boca Raton: Chapman the determinants of Swiss hotel performance: A neu- and Hall/CRC. ral network analysis. Tourism Management, 50, 130- Xiang, Z., Schwartz, Z., Gerdes, J. H., & Uysal, M. (2015). 141. doi:10.1016/j.tourman.2015.01.028 What can big data and text analytics tell us about Radojevic, T., Stanisic, N., & Stanic, N. (2015a). Ensuring hotel guest experience and satisfaction? Internation- positive feedback: Factors that influence customer al Journal of Hospitality Management, 44, 120-130. satisfaction in the contemporary hospitality indus- doi:10.1016/j.ijhm.2014.10.013 try. Tourism Management, 51, 13-21. doi:10.1016/j. tourman.2015.04.002 Radojevic, T., Stanisic, N., & Stanic, N. (2015b). Solo travellers assign higher ratings than families: Examin- ing customer satisfaction by demographic group. Tourism Management Perspectives, 16, 247-258. doi:10.1016/j.tmp.2015.08.004

10 Invited Papers SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Key issues on Tourism Destination Competitiveness

Anatomy of sustainable tourism development: A case study of the city of Split

Lidija Petrić, Abstract: By accepting the fact that there are many different approaches to sustainable Biljana Crnjak-Karanović development, this paper aims to investigate, using a particular case study, whether tourism development model of the city of Split, Croatia, a well-known University of Split, Faculty of Economics, tourism destination, is based on the principles of sustainability, thus proving Split, Croatia its orientation to quality assurance. The authors have analyzed this model from all three aspects of sustainability, i.e. economic, environmental and social. For the purpose of a deeper investigation of this matter, desk research has been conducted consulting a substantial amount of sources. The paper is structured as follows: after a brief overview of the concept of sustainable tourism development from the three main sustainable development aspects, the question of co-habitation of sustainability, quality and competitiveness of a tourism destination is raised. The main part of the study attempts to draw the three main aspects of sustainability together by blending the theoretical issues with the practical experience from the case study. Alongside with highlighting the basic developmental issues, proposals of tourism management mechanisms in the city of Split are offered with the aim of making it more sustainable and hence, fostering its long-run quality and attractiveness.

Keywords: destination, sustainability, quality, city of Split.

Introduction1

The issue of sustainable development has been well researched in ex- tant literature and attracted considerable debate and analysis from virtually all academic standpoints (Petrić, 2012). Although numerous papers and books have been written on this topic, from the so called Bruntland’s report in 1987 (World Commission on Environment and Development) up to the most recent book, titled The Age of Sustainable Development (2015), written by a well-known American scholar, professor Jeffrey Sachs, it cannot be said that there is a universally acceptable definition of this concept. However, most definitions highlight three major pillars of the sustainability concept, i.e., economic, social and environmental (Mu- nasinghe, 2003, as cited in Petrić, 2012). Correspondence: Lidija Petrić 1 Some parts of this research have been based on a book chapter: Petrić, L. (2012), Croatian Tourism Development Model - Anatomy of an Un/sustainability. In Ghenai, e-mail: C. (Ed). Sustainable Development - Policy and Urban Development - Tourism- Life Sci- [email protected] ence - Management-Environment / Book 3. (pp. 119-147). In Tech Open Access Rijeka. 11 Sitcon 2016 Doi: 10.15308/Sitcon-2016-11-16 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Along with the evolution of sustainable development Social sustainability based on competent local gov- discourse, concerns about the environmental and social ernment and empowered local community is achieved impacts of tourism have escalated in recent years due by enhancing education, strengthening the participation to the ever-growing trend of tourism demand, with the of the local community in the planning processes, by projection of more than 1.8 billion arrivals worldwide creating networks, public-private partnerships and other by 2030 (United Nations World Tourism Organization, types of cooperation and by enhancing socially responsi- 2016). What additionally worsens this situation is an un- ble behavior in the community (Petrić, 2012). even distribution of tourist flows in terms of their domi- Based on the above-given theoretical overview, this nant regional concentration (predominantly Europe) paper tends to further investigate, through an analysis and high seasonal concentration of demand (Petrić, of the specific case study, whether tourism development 2012). Such concept of mass tourism development poses model in the city of Split, Croatia, a well-known tourism intense pressure on the overall capacity of destinations to destination, is oriented towards sustainability and hence, cope with tourists and their numerous activities within quality assurance. The main part of the study attempts a relatively short period of time. This situation gradu- to draw three main aspects of sustainability together by ally brings destinations to the supply quality degrada- blending the theoretical issues with the practical expe- tion, and consequently, diminishes both residents’ and rience from the case study. After highlighting the ba- visitors’ satisfaction, which is well explained by the But- sic developmental issues, some tourism management ler’s theory of a destination’s life cycle and Doxey’s in- mechanisms are proposed in the city of Split in order to dex of irritation (Claiborne 2010, as cited in: Petrić and make it more sustainable and to foster its attractiveness, Pivčević, 2016). quality and competitiveness in the long run. Any destination that tends to avoid the loss of attractiveness and competitive position in the market in the discussion long run has to opt for sustainable development in all three aspects of sustainability. Hence, in order to achieve economic sustainability which presumes growth, effi- Sustainability - attractiveness - quality - satisfaction - tourism ciency and stability (Munasinghe, 2003, as cited in Petrić, destination competitiveness; is there co-habitation? 2012), some preconditions are to be fulfilled. Firstly, destination’s authorities have to take care of the appropriate The issue of tourism sustainability is usually associ- structure, quality and number of accommodation capaci- ated with the concept of quality. It is widely accepted that ties so as to ensure optimal financial results for all stake- destination attributes determine the perceived quality of holders. Furthermore, special measures should be intro- a destination’s supply, and that perceived quality affects duced for the purpose of distributing demand evenly in visitors’ satisfaction (Žabkar et al., 2010). Satisfaction is space and time (through subsidies and tax exemptions considered to be the central concept in tourism (Chen on the supply side and/or different marketing techniques and Tsai, 2007; Prayag, 2009). However, the findings on the demand side). Local authorities together with the regarding the quality components that (co) shape the local Destination Management Organization (DMO) overall quality perceptions, and their relative importance should invest considerable effort, using a set of econom- differ, since “relevant attributes are destination-specific ic tools, to attract investors to a destination, particularly and cannot be generalized across destinations” (Žabkar those who can guarantee high quality of services without et al., 2010, p. 543). What can be generalized are the con- endangering its resources in the long run. sequences of satisfaction, i.e. satisfaction influences the Environmental sustainability is achieved when envi- choice of a destination, the consumption of products ronment is preserved and properly protected and pol- and services and the decision to return. As competition lution reduced to a minimum. It may be realized by a between destinations intensifies, the attractiveness of a number of measures. However, most of them come out destination becomes crucial. Mayo and Jarvis (1980; as of a comprehensive/integral planning policy created with cited in Vangesayi, 2003, p. 638) define attractiveness as respect to a destination’s carrying capacities. Also, en- “the perceived ability of the destination to deliver indi- vironmental sustainability strongly depends on whether vidual benefits.” This ability is enhanced by the attributes the destination and all its stakeholders have implemented of a destination (Vangesayi, 2003), since these attributes different environmental management measures such as help people to evaluate the attractiveness of a destina- “reduce-reuse-recycle measures”, eco taxes, environmen- tion, and make relevant choices (i.e. choose one destina- tal management charge, group size limitations, eco certi- tion over another). Tourism destination will assume a fication (Petrić, 2011). successful position in the tourism market depending on 12 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS how tourism attractions develop value for tourists, and more sustainable and to retain or even enhance its com- how well destination resources are managed (Gomezelj petitive position. and Mihalic, 2008; Heeley, 2015). Considering everything written so far, it can be con- A case study: Tourism development in Split, Croatia cluded that maintaining a high level of quality is important for tourism destinations competitiveness. To that According to the 2011 census (Croatian Bureau of end, a carefully designed and well executed program of Statistics, 2011), the city of Split had 178,102 inhabitants, destination management (DM) becomes vital, as it can with a wider urban area reaching over 300,000 inhab- contribute to destination’s sustainability. Go and Govers itants. As an intraregional transport hub and popular (2000) have proved, by examining quality management tourism destination, the city is a link to numerous Adri- performance in seven European destinations that, de- atic islands and the Apennine peninsula. It is one of the spite the whole range of common policies and related in- oldest cities in the area. While traditionally considered struments, each of them has formulated diverging strate- just over 1,700 years old, counting from the construc- gies to manage their quality, thus supporting the claim tion of Diocletian’s Palace in 305 AD, the city was in fact that destination management is destination specific. A founded as the Greek colony of Aspálathos in the 4th tourism destination is perceived by tourists as a single century BC, about 2,400 years ago. The present city of entity. In fact, it comprises several stakeholder groups: Split has developed into a modern town keeping traces host population, tourists, public sector and government, from all periods and incorporating them into a harmon- tour operators and tourism enterprises (Buhalis, 2000). ic whole. In 1979, its historic core with the Diocletian’s The interest and priorities of various stakeholders do not palace was declared a World Heritage Site on account of always coincide, which is why destinations are consid- its well-preserved architecture from all periods, but also ered the most difficult entities to manage (Dmitrovic et because of the fact that it is still a living organism with all al., 2009; Petrić, 2011). The task of destination manage- urban functions. Although Split was the administrative ment (and marketing) is often entrusted to a Destination and economic center of the middle Dalmatia, its development has been threatened by a devastating process of Management Organization (DMO). It is imperative for deindustrialization of suburban areas after 1990s ,which a DMO to ensure that benefits of tourism activity are took the city on the crossroads without a clear idea on shared fairly between all stakeholders and that sustain- where to go to. Due to the lack of development vision, able practices safeguard the regeneration of resources tourism has gradually become the most dominant, if utilized in tourism production. As explained by Buha- not the only economic activity in the city (Petrić and lis (2000), DMO should act as a tool and facilitator to Pivčević, 2016). achieve a range of strategic objectives such as maximizing visitors’ satisfaction and profitability of local enterprises, enhancing the long-term prosperity of the local Is tourism development in Split sustainable population, and optimizing available resources through in the economic sense of the word? destination’s sustainable development. To answer the above question, it is necessary to reas- To conclude, co-habitation between sustainability-at- sess the development model of Split tourism. It is note- tractiveness-perceived quality of destination supply-sat- worthy that before 1990s up to the middle of the 2000s, isfaction-competitiveness does exist. Destination sustain- the city of Split was a transit destination for the visitors ability and destination competitiveness are like two sides travelling to the middle Dalmatian islands. Due to the of the same coin. One side of the coin (i.e. sustainability) proliferation of the real estate market demand for the reflects the supply-side view, while the other one (i.e. com- properties in Split and individual efforts of the industri- petitiveness) reflects the demand-side view. ous local entrepreneurs, tourism demand has gradually In the following chapters, supply-side view of the started to grow, from approximately 80,000 arrivals and present state of the art of tourism development in the 110,000 overnights at the end of the 1990s up to 458,465 city of Split is briefly analyzed for the purpose of draw- arrivals in 2015 (growth of 16% compared to 2014) and ing attention to the fact that it is far from being sus- 1,353,957 overnights (growth of 22%), according to the tainable, although as an emerging destination, it still Split Tourist Board. Unfortunately, these numbers are experiences an ever-growing demand. However, as the still mostly concentrated on the period between June and problems continuously grow, the question imposes as September with more than 85% of overnights and 80% to how long the city of Split will fulfill tourists’ expecta- of arrivals realized. Such a tremendous concentration of tions and what actions should be taken to help it become visitors within a short period of time brings into focus the 13 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

problem of spatial oversaturation i.e. carrying capacities Environmental sustainability of the Split tourism: being overpassed. Apart from the gentrificationprocess, The truth behind the numbers a rapid “tourismification” has been changing the usage of the old buildings in the historic core turning them As already highlighted, the city of Split is suffer- into seasonal accommodation facilities (Mikulić and ing from an uneven time and spatial distribution of Petrić, 2013, as cited in Petrić and Pivčević, 2016). It is demand leading to the high concentration of accom- an amazingly rapid process. According to the Tourism modation facilities in the old and fragile historic core. Board Data for the year 2014, Split recorded in total This can be proved by the so called tourism functional- 14.188 tourist beds, which is 73% more compared to ity index (TFI), which represents the ratio between the 2012. In 2015, there were approximately 17,047 beds highest number of tourists in the peak season and the available, indicating further growth of 20 % within just number of permanent population and is measured by one year. Out of 14,188 beds registered in Split in 2014, the number of beds per 100 inhabitants. With regard only 2,908 were hotel beds (or 20%), most of them (over to the city of Split as a whole, TFI indicates a rather low 80%) being 4 and 5 star hotels, while the rest of 80% coefficient, only 7.8 beds per 100 inhabitants. However, or 11,280 was in supplementary capacities, dominantly when calculated for the city historic core, it grows up to private households and apartments which, despite 94.35 in 2014 (related to 60.85 in 2012), which is very high with the further growing tendency. To add to tour- their growing quality are not city’s entrepreneurial po- ism oversaturation argument, one has to bear in mind tential but more a social phenomenon. Also, it can be that Split also hosts on average 300,000 cruise tourists observed that apart from the Radisson Blu hotel chain, per year, coming mostly from May to October, a huge Split hasn’t attracted any other international chain. The number of daily visitors from the County (which hosts reasons for that lie in rather short tourist season, and over 12 mil tourists per year) and elsewhere and other lack of both entertainments in the post seasonal period people in transit (over 7 mil passengers on a yearly ba- and direct connections with European capitals during sis), not to forget the citizens of Split and its gravitating the year. Because of the poor statistics, the general data area. Such a concentration of people within a short pe- on Croatian hotel sector performance may be used to riod of season creates various pollution problems and indicate poor efficiency of the hotels in Split. Hence, the the consequent change or loss of biodiversity. Damages Average Daily Rate of 99 EUR per room/day in 2013 is to cultural heritage occur on a daily basis, including the lower in Croatia than in other rival tourism country, cultural identity (or so called “genius loci”) loss. such as in France, Italy, Greece and Turkey (with 167.4; Although the ecological awareness among tourist 126.8; 101 and 100.5 Euro’s per day, respectively). As entrepreneurs has an ever-rising trend, implementation regards the Revenue per available room (RevPar) in- of the concept of environmental management is still a dicator for 2013, the situation is quite the same: it is rare case. The exceptions are the hotels operating within lower in Croatia (45.2) than in other competitor coun- international chains whose ecologically oriented opera- tries (112.7 in France, 77.1 in Italy, 57.8 in Greece and tion is the basic element of their competitive strategy 63.3 in Turkey) (Galičić, 2015). (such as the Radisson Blu hotel in Split which is the first It is worth mentioning an ever worsening problem city hotel possessing the Green Key international eco of the infrastructure which is not sufficiently developed certificate). Recently, a few small city hotels have im- to follow the rapid growth of demand and needs of oth- plemented measures to rationalize energy consumption er users. There is a constant lack of parking places and due to the active national subsidizing program. Note- other communal and traffic infrastructural facilities that worthy is that although Split has 5 beaches and 2 mari- nas with the EU Blue Flag certificate, this is not satisfy- have been planned for incomparably lower number of ing given that it possesses more than 25 km of beaches. users. As for other environmental management instruments, The short analysis of the economic performance of they are not used at all to our best knowledge. Although the Split tourism development model has shown that Split has spatial plans and a number of written strategic the main requirements of sustainability, i.e. growth, ef- documents, monitoring of their implementation is rare- ficiency and stability, have not been fulfilled in a satisfac- ly done consequently leading to voluntarism in the use tory manner. Split tourism is unfortunately developing of its resources. One of the worst examples of such vol- with hardly any strategy. Measures have been put into untarism is urban chaos on the very famous city bathing operation with no respect to the wider context of de- area named Žnjan, which hosts, on a relatively narrow velopment, and the consequences of bad decisions are maritime (state protected) line, 26 improvised café bars, usually not penalized. most of them doing business illegally. 14 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Social sustainability: do we really know what it is? Results and recommendations

Though positive changes have been recorded in The city of Split will undoubtedly remain the mass Croatia as a whole, especially after its accession to tourism destination in the future. However, the dilemma the European Union, there is still much to be done in reimains as to what kind of mass tourism it will turn terms of building social capital (Petrić, 2012). Within into, undifferentiated and seasonal, as it is now or the this concept public governance efficiency enhancement one that has more modest growth in the number of and local community empowerment are the two basic tourists but is focused on their seasonal (and spatial) issues to be considered. The local government of the redistribution. If this option is chosen, Split has to create city of Split, no matter which political option it belongs a spectrum of both direct and supplementary tourism to, doesn’t actively manage the tourism development services that can satisfy different kinds of guests. How- processes, leaving them completely to the arbitrariness ever, due to its status of the UNESCOs city, Split should of local entrepreneurs. Poorly managed “cultural tour- put most of its efforts into cultural tourism develop- ism”, to a great deal “consumed” by daily visitors, dominantly cruise ship visitors, has additionally deteriorated ment, which may be a trigger for more intense cultural the quality of life in the historic core of the city, trans- and creative industries development. Also, it is essential forming it into a stage for non-authentic, tourist per- that it develops a wider spectrum of economic activities formances. With the recent rise of party tourism, it has which is important not only for creating more diversi- become evident that the City government has no clear fied tourist supply but it also helps in reducing the lo- vision on how to position the city on the tourism market cal economy overreliance on tourism. Local authorities and what consequences it will experience in the near together with the local DMO should put more efforts future due to such unplanned tourism development. At into rising the awareness of the positive and negative the same time, in the absence of other economic activi- effects of tourism among the local population. They ties, thousands of small entrepreneurs and room renters should also support promotion and implementation get involved in tourism business (often with no previous of a planned solution, which ensures that the unique knowledge and education in tourism). Many of them destination identity is maintained. The level of control don’t even consider the possibility of doing tourism on a over the behavior of all relevant stakeholders should also whole-year basis and are most often not even interested be raised. Apart from hard management tools/instru- in participating in its management and planning. The ments, the soft ones, such as education, partnership, findings of the pilot research study conducted on a sam- networks and other kinds of cooperation should also be ple of 132 Split community members from December implemented for the purpose of rising up the manage- 26, 2015 until January 26, 2016, have mostly confirmed ment efficiency of the local tourism system as a whole. the above-given assumptions proving that unsustainable Also, by introducing eco certificates, codes of conduct, or “tourism vs. community” development model is being Carrying Capacity Assessment and other tools and in- in place in Split (Petrić and Pivčević, 2016). In addition, struments, the principles of responsible behavior should local entrepreneurs prefer engagement in national as- be promoted and implemented more intensely (Petrić, sociations rather than in local/regional networks. Obvi- 2012). This list is not exhaustive and indicates a range ously, there is no systematic approach to empowerment of principles that underpin the strategic and integrated of the Split community to actively contribute to sustain- planning for tourism areas. able tourism development. Further analysis of the local accommodation facilities’ web sites shows that the concept of socially respon- Conclusion sible behavior has been rarely implemented in their business strategy. The exception is the EU funded project “Responsible behavior cleans the world”, launched by The nature of tourism is obviously ambivalent. On five city hotels together with the local non- government the one hand, it might act as a catalyst for wider socio- organization and the University of Split with the aim of economic development or regeneration of a tourism founding a small soap recycling centre employing the destination, while on the other one, the growth of tour- disabled people. It should be noted that although pub- ism generates different environmental costs usually ac- lic–private partnerships may have a variety of forms, one companied by a variety of economic, social, cultural and can find rare cases of it in Split, mostly in the area of new political consequences. For the purpose of avoiding or at events creation, promotion and stakeholders education least diminishing these costs and achieving sustainability, through the tourist board. destination should employ the appropriate management 15 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

techniques and tools, including the use of integral/com- Petrić, L. (2011). Upravljanje turističkom destinacijom- prehensive planning as the most important one. načela i praksa. Split: Faculty of Economics, Uni- versity of Split. In Croatian. The case study of the tourism development model of the city of Split has shown that sustainability has not Petrić, L. (2012). Croatian Tourism Development Mod- el - Anatomy of an Un/sustainability. In Ghenai, been achieved in any of the observed areas. Because of C. (Ed). Sustainable Development - Policy and Ur- this, its long-term attractiveness and competitiveness is ban Development - Tourism- Life Science - Man- endangered, hence urging for immediate actions. agement-Environment / Book 3. (pp. 119-147). Rijeka. In Tech Open Access. Retrieved August References: 2, 2016, from http://www.intechopen.com/books/ sustainable-development-policy-and-urban-development-tourism-life-science-management- Buhalis, D. (2000). Marketing the competitive destina- and-environment. doi:10.5772/2426 tion of the future. Tourism Management, 21(1), 97- Petrić, L., & Pivčević, S. (2016). Community based tour- 116. doi:10.1016/S0261-5177(99)00095-3. ism development – insights from Split, Croatia. In Chen, C. F., & Tsai, D. (2007). How destination image Tourism & Hospitality Industry 2016, 28-29 April, and evaluative factors affect behavioral inten- 2016. (pp. 294-307). Opatija: Faculty of Tourism tions? Tourism Management, 28(4), 1115-1122. and Hospitality Management. doi:10.1016/j.tourman.2006.07.007. Prayag, G. (2009). Tourists’ evaluations of destination image, Croatian Bureau of Statistics (2016). Census of Popula- satisfaction and future behavioral intentions: The case tion, Households and Dwellings 2011. Statistical of Mauritius. Journal of Travel and Tourism Market- report 1583. Zagreb: Croatian Bureau of Statistics. ing, 26(8), 836-853. doi:10.1080/10548400903358729. Dmitrović, T., et al. (2009). Conceptualizing tourist satis- Sachs, J. (2015). The Age of Sustainable Development. New faction at the destination level. International Jour- York: Columbia University Press. nal of Culture, Tourism and Hospitality Research, United Nations World Tourism Organization. 3 (2), 116-126. doi:10.1108/17506180910962122. (2016). Tourism highlights. Madrid: UNWTO. Galičić, V. (2015). Tourism in Croatia: Truths and Mis- doi:10.18111/9789284418145. conceptions. Informatologia, 48(1-2), 78-94. Vengesay, S. (2003). A Conceptual model of tourism Go, F. M., Govers, R. (2000). Integrated quality man- destination competitiveness and attractiveness. agement for turist destinations: a European per- ANZMAC 2003 Conference Proceedings, 1-3 De- spective on achieving competitiveness. Tourism cember, 2016 (pp. 637-647). Adelaide: University Management, 21(1), 79-88. doi:10.1016/S0261- of South Australia. 5177(99)00098-9. World Commission on Environment and Develop- Gomzelj, D. O., & Mihalic, T. (2008). Destination com- ment, (1987). Our Common Future. Retrieved petitiveness - applying different models, the case June 12, 2016, from http://www.un-documents. of Slovenia. Tourism Management, 29(2), 294-307. net/wced-ocf.htm. doi:10.1016/j.tourman.2007.03.009. Žabkar,V., Makovec Brencic, M., & Dmitrovič, T. (2010). Heely, J. (2010). Urban destinations marketing in con- Modelling perceived quality, visitor satisfac- temporary Europe - what does „good“ look like? tion and behavioural intentions at the destina- International Journal of Tourism Cities, 1(1), 36- tion level. Tourism management, 31(4), 537-546. 49. doi:10.1108/IJTC-08-2014-0003. doi:10.1016/j.tourman.2009.06.005.

16 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Key issues on Tourism Destination Competitiveness

The analysis of the local population’s attitudes towards the effects of tourism development: A case study of Amasya

Serif Baldiran Abstract: In recent years, tourism has become one of the regional development tools because due to its high impact on other sectors, the ability of enhancing em- Amasya University, ployment rates and adaptability to the peculiarities of the region. Sustainable Akbilek Mah. Muhsin Yazıcıoğlu Cad. No:7, tourism development depends on the regional tourism policies that consider Turkey the impact of tourism on the local population and their approach to tourism. Amasya is a city in Turkey with a very rich cultural heritage and 7,500 years long history. In Amasya, tourism comes to everybody’s mind when development and growth are mentioned. To that end, significant investments have recently been made in tourism infrastructure and promotion of Amasya. However, the impact of tourism on the local communities and their approaches is not clear. This study is aimed at elaborating the issue of tourism development impact on the local people, the local people’s approach to tourism and the regional people’s attitudes towards tourists. After the literature research and theoretical background, a questionnaire was applied to a randomly selected sample of 420 individuals. Five-point Likert scale was used and the obtained data was analyzed using the SPSS software. The results are descriptive and inferential statistics. The data was tested with Cronbach’s Alpha test for calculating confidence. Principal component analysis (PCA) was applied to determine the data validity. Keywords: tourism impact, regional development, tourism development, cultural destination, city tourism.

Introduction

Although tourism is a social activity, its results are visible in economic terms. Tourism is one of the most important tools used in regional development and has a high impact on other sectors and easily adapts to their unique properties. However, large investments in tourism and tourism infrastructure development, determining the angle of view of local communities for tourism development in the region, are important for encouraging healthy tourism-oriented development and sustainability of the policies. The impact of tourism development on the local community in the Correspondence: region is of paramount importance and is reflected in three different Serif Baldiran ways, including environmental, socio-cultural and general economic as- e-mail: [email protected] pect (Andereck et al., 2005). However, these effects can be perceived as positive or negative on the local population (Upchurch and Teiva, 2000). 17 Sitcon 2016 Doi: 10.15308/Sitcon-2016-17-26 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

For the economic purposes, tourism development aims At the same time, there is evidence that tourism causes at controlling their effects on the local community as smuggling, gambling and drug use in addition to the much as possible. community’s traditional spoilage in tourism develop- The economic impact of tourism is composed of fac- ment areas (Kim, Uysal and Sirg, 2013). tors such as inflation, jobs creation, tax revenues and lo- Tourism has both positive and negative effects on cal government spending. The regions with not so many the environmental factors. The most important positive alternatives prefer to use their local socio-cultural and impact of tourism on the environment is the increas- natural differences in tourism development. Besides that, ing awareness of environmental protection with the high multiplier effects of tourism development on other conservation of wildlife and national parks. However, sectors create a positive impact on tourism development most research on the effects of facing the pressure and in other sectors and fulfil the role of locomotive for re- protection of the environment in tourism is focused on gional development. the environmental impact of tourism (Kim et al., 2013). Economic benefits are expected to increase the im- Again, on the basis of the economic behaviour of the lo- pact of tourism on local communities in a positive way. cal population towards tourism development, there may The view of the groups having more benefits from tour- be social and environmental aspects (Kuvana and Akan, ism may be more favourable to the sectors than fewer 2005). The potential environmental impact of tourism benefits from tourism (Claudia and Gursoy, 2004). Ac- is seen as air pollution, waste water, fertilizer spill, de- cording to Andrew Lepp, the main factor of the local struction of wildlife, degradation of natural habitats, de- people in being positive to tourism is tourism contribu- struction of forests and vegetation, and degradation of tion to regional development, creation of new income wetlands and beaches (Andereck et al., 2005). source and regional expectations for better future with The planned development of tourism at the regional tourism (Andrew, 2007). level is to ensure significant contribution of tourism to However, negative effects of tourism on the region the region and the highest level of participation of the are described as increasing prices and asset values re- local people in tourism development (Caliskan and Tu- lated to economic factors, as well as crowding, increased tuncu, 2008). However, this process in most developed pollution and social disadvantages such as increased regions where tourism is developing is occurring in an crime rate and a growing number of undesirable activi- uncontrolled and unplanned manner. However, there ties such as gambling and alcohol (Upchurch and Teiva, are still questions to be answered to understand the be- 2000). The negative thoughts of local residents toward haviour of the local people in regional tourism develop- tourism are directly related to how they were disturbed ment. One of the most relevant questions for this situ- by the tourism development and how they perceived ation refers to the kind of tourist behavior that ensures threat against its own value. the formation of attitudes and tolerance of local people The negative socio-cultural impacts of tourism are towards tourists. the increased crime rates, cultural interaction, exchange It is not possible to easily understand tourism re- created in the traditions and customs. However, the so- gional development and behaviour of local communities cio-cultural effects of tourism are two-sided. First, the towards tourism development in the region. However, landlord is able to influence other cultures, and as a re- according to the development of the region’s tourism, sult, emerges intercultural understanding and tolerance certain patterns of behaviour towards tourism devel- between cultures. The second is to provide other people opment can be developed. In most research on tour- their own culture, to live in a community, increase the ism development, the behaviour developed by the local sense of cohesion and belonging (Besculides and Mc- community illustrates the level of tourism development Cormick, 2002). Research has shown that tourism de- in the region. Butler’s “Tourism Regions Development velopment in the region increases interest in local crafts, Life Cycle” is one of the most important studies on this cultural identity expressing values, ideas and related in- matter. According to Butler’s hypothesis, an increas- creases in their own culture. At the same time, tourism ing number of tourists visiting a particular area, lo- development increases cultural exchange opportunities cal people approaching tolerance to the tourist at the for the local people and feeling of identity and belong- beginning can have a more negative direction and be ing to the region (Claudia and Gursoy, 2004). The nega- more sceptical about the long term benefits for social, tive impact on tourism in the social structure could be economic and environmental aspects (Caliskan and Tu- due to traffic issues leading to different social problems. tuncu, 2008). 18 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

RESEARCH METHOD Accommodation Facilities

Region Covered by the Research The majority of accommodation establishments have the municipal certificate. That is why Amasya has got Amasya is a historic city located in the Central Black historical homes and mansion and they are used as ho- Sea area of Turkey, between Tokat province on its east stels by the local people. Tourism businesses located in and south, Corum province on its west, and Samsun Amasya are predominately small businesses and histo- province on its north. According to the population cen- rical hostels. sus in 2013, Amasya province’s population amounts to about 321,977 and its city centre population is about Table 1. Accommodation facilities (2012) 96,220. Amasya’s seasonal specialties seem to be deter- Number of Number of Number of mined by an intermediate climate between continental Facilities Facility Rooms Bedrooms climate and climate in the Black Sea region. Tourism Investment 4 220 502 Licenced Tourism Operation 15 427 852 Licenced

Certified Municipal 34 618 1,462

Source: Turkish Culture and Tourism Ministry (2015)

In 2012, there were four facilities with tourism in- Figure 1. Location of Amasya in Turkey vestment certificate and 15 licensed tourism businesses. In that year, the number of municipalities certified accommodation facilities was 34. Over a ten-year period, The history of Amasya covers a period of 7500 years the number of tourism operation licenced facilities has and is located in Amasya various civilizations during this period. Amasya’s name dates back to the Hittites Em- remained relatively the same, but the number of mu- pire. Amasya historian Strabo (M.Ö.60-M.S.19) stated nicipalities with certified accommodation facilities has that the city’s name is Amasia. increased. This leads to the discussion on the quality issues in tourism development in Amasya. Amasya, one of the brands in Turkey, has undergone significant development of tourism infrastructure and has achieved a significant increase in the number of Tourist Numbers in Amasya Province tourists in recent years due to this development. How- ever, we do not dispose of the exact data on whether The most important indicator of tourism develop- the local people are prepared for such development, ment in Amasya is the number of tourists coming to how they perceive tourism and how tourism-oriented the province. Table 2 and 3 show the number of tourists approach and behaviour are important for tourism de- according to the number of arrivals, overnights spent, velopment. average length of stay and occupancy rate in establishments in Amasya Province. Table 2 shows the number Indicators of Tourism Development in Amasya Province of changes occurring in a 10-year period for the certified tourism facilities, while Table 3 shows the number of Tourists largely come to Amasya for cultural tour- changes occurring in a 10-year period for the certified ism, health tourism, religious tourism and hunting tour- municipal facilities. According to the data in the tourism. Amasya is especially described by the Ministry of ism certified facilities, there are not any pivotal changes Culture and Tourism of the Republic of Turkey, as a city in the number of tourists staying in certified tourism among the cultural tourism brand cities that should be facilities for the decade. That means that the number developed. The tourists visiting Amasya are observed as of certified tourism facilities has been the same in the a daily structure when they travel to Black Sea or casu- decade. At the same time, tourism development in the ally. However, the number of accommodation facilities city has started with governmental structure and the de- in Amasya is increasing. velopment continues in the manner of locality. 19 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

In Table 2, the number of tourists staying in the mu- Research Method nicipal certified business is given. The number of tourists staying in municipalities certified facilities increased by Research was applied to local communities of Amasya, 100 % over a ten-year period. However, the occupancy living within the borders of the region for at least five rate did not increase so much in the observed period. The years, between the ages of 18-65. In the study, after the reason can be argued, which means that the number of literature review and theoretical background, the survey certified municipal facilities has increased as much as the was applied to 546 people selected by means of a random number of tourists. It also shows that the accommodations method. The survey confidence level is 95% (1.96) and the facilities are increasing as certified municipal facilities. confidence interval is 3.5. Five-point Likert method used According to the data given in Table 2, the number for data collection was analysed by the SPSS software. of tourists accommodated in certified tourism facilities The data were based on the descriptive and inferential has remained the same of the years. However, occupancy statistics and the reliability analysis of survey questions rate is falling slightly. The number of tourists accommo- (Cronbach’s alpha). At the same time, the factor analysis dated in municipalities (Table 3) in accommodations (Principal Component Analysis) was applied to determine certified is increasing but the occupancy rate is staying the validity of the variables and regression analysis was same in this duration. During this time, the number of performed to examine the effects of independent variables certified municipal accommodations shows that the in- on the dependent variables. creasing number of facilities is increasing at same rate as the number of tourist arrivals.

Table 2. The number of tourists in Amasya province(certified tourism facilities)

Number of Arrivals Nights Spent Average Length of Stay Occupancy Rate Years Foreigner Citizen Total Foreigner Citizen Total Foreigner Citizen Total Foreigner Citizen Total 2006 4.675 58.595 63.270 6.442 88.857 95.299 1,38 1,52 1,51 2,97 41,01 43,99 2007 3.342 47.105 50.447 4.618 69.627 74.245 1,40 1,50 1,50 2,38 35,91 38,29 2008 4.681 39.465 44.146 6.427 55.884 62.311 1,40 1,40 1,40 2,73 23,70 26,42 2009 3.553 42.100 45.653 5.685 54.386 60.071 1,60 1,29 1,32 2,23 21,29 23,51 2010 2.087 25.302 27.389 2.747 29.201 31.948 1,32 1,15 1,17 1,28 13,56 14,84 2011 6.801 54.200 61.001 9.893 78.666 88.559 1,45 1,45 1,45 3,47 27,60 31,07 2012 5.716 58.427 64.143 8.985 86.322 95.307 1,57 1,48 1,49 2,83 27,17 30,00 2013 5.206 56.065 61.271 8.519 82.036 90.555 1,64 1,46 1,48 2,75 26,48 29,23 2014 4.399 55.163 59.562 7.456 82.515 89.971 1,69 1,50 1,51 2,58 28,56 31,14 2015 3.607 59.639 63.246 5.801 89.311 95.112 1,61 1,50 1,50 1,85 28,42 30,27 Source: Ministry of Culture and Tourism, Republic of Turkey (2015)

Table 3. The number of tourisms in Amasya (certified municipal facilities)

Number of Arrivals Nights Spent Average Length of Stay Occupancy Rate Years Foreigner Citizen Total Foreigner Citizen Total Foreigner Citizen Total Foreigner Citizen Total 2006 661 40.020 40.681 894 55.276 56.170 1,35 1,38 1,38 0,32 19,95 20,28 2007 2.979 55.703 58.682 4.223 68.891 73.114 1,42 1,24 1,25 1,11 18,10 19,21 2008 1 826 44 650 46 476 2 855 65 719 68 574 1,60 1,50 1,50 0,75 17,22 17,96 2009 1.553 58.728 60.281 2.732 77.666 80.398 1,76 1,32 1,33 0,67 19,14 19,81 2010 1.881 70.750 72.631 3.326 105.979 109.305 1,77 1,50 1,50 0,69 21,93 22,62 2011 1.239 56.700 57.939 2.371 100.447 102.818 1,91 1,77 1,77 0,46 19,53 19,99 2012 3.255 52.649 55.904 4.995 105.677 110.672 1,53 2,01 1,98 0,94 19,91 20,85 2013 2.241 62.886 65.127 3.205 108.504 111.709 1,43 1,73 1,72 0,59 19,96 20,55 2014 11.334 59.227 70.561 22.769 106.240 129.009 2,01 1,79 1,83 4,19 19,55 23,74 2015 5.837 89.466 95.303 11.852 133.655 145.507 2,03 1,49 1,53 2,20 24,78 26,98 Source: Ministry of Culture and Tourism, Republic of Turkey (2015) 20 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

RESEARCH RESULTS Feeling of Belonging to Amasya

Demographic Breakdown of Participants In the second part of the questionnaire, multiple- The survey included the questions related to re- choice questions were used to determine the feeling of spondents’ gender, age, their education, occupation and belonging to Amasya with the questions “How many income level to determine the demographic character- years have you lived in Amasya?” and “How would you istics of the participants. The multiple-choice questions describe yourself in terms of Amasya?” have already been given to participants to choose only As regards the participants’ sense of belonging to one set as optional. Amasya, 73.3% of respondents are described as natives Table 4 shows that the overall sample of respondents of Amasya. Accordingly, it is understood that the par- (N = 536) included 45.7% of male and 54.5% of women ticipants are largely composed of residents of Amasya. participants. 39% of 536 participants seem to possess Namely, 80% of respondents seem to have been living a university degree. The participants in the survey are in Amasya for more than 5 years, while 90.4% of re- aged between 36-50 years. spondents stated that that their job is not connected to tourism.

Table 4. Demographic characteristics of the participants N Valid Frequency Percent Valid Missing Percent Male 245 45.7 45.7 Gender 536 0 Woman 291 54.3 54.3 Total 536 100.0 100.0 Primary school 68 12.7 12.8 Middle School 57 10.6 10.7 High school 175 32.6 33.0 Educational Background 531 5 University 207 38.6 39.0 Graduate 24 4.5 4.5 Total 531 99.1 100.0 18-25 131 24.4 24.5 26-35 188 35.1 35.2 Age 534 2 36-50 192 35.8 36.0 51-65 23 4.3 4.3 Total 534 99.6 100.0

Table 5. Feeling of belonging to Amasya of the participants N Valid Frequency Percent Valid Missing Percent Not Native 142 26.5 26.7 How would you describe 532 4 Native 390 72.8 73.3 yourself in terms of Amasya? Total 532 99.3 100.0 Less than 1 year 17 3.2 3.2 1-5 Years 47 8.8 8.8 6-10 Years 66 12.3 12.4 How many years have you 532 4 21-30 Years 115 21.5 21.6 lived in Amasya? 11-20 Years 133 24.8 25.0 More than 20 Years 154 28.7 28.9 Total 532 99.3 100.0 Yes 50 9.3 9.6 Is your job somehow related 522 14 No 472 88.1 90.4 to tourism? Total 522 97.4 100.0

21 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Types of indigenous behaviour against tourists in Amasya Four factors were determined according to the results of the factor analysis. The first factor, Threat Per- In this part, Likert scale questions were posed to re- ception (FK1), is aimed at testing whether there is any veal how the local people living in Amasya perceive and threat perception of the local population from tourists. This factor is intended to test the local people feeling of behave towards tourists. Propositions with respect to the threat. This factor is aimed at testing whether there is questions in this part of the study have been subjected to any feeling of threat in the subjects of religious values, the factor analysis and reliability statistics. traditions and customs, sex life perception and the local population’s native language. Exploratory Factor Analysis (EFA) The second factor, Negative Thoughts (FK2), is intended to test whether there are any negative thoughts Different questions created by the five-point Likert of the local population for tourists. This factor aims to scale to measure the local people’s behaviour towards test whether the native people are somehow disturbed tourists in Amasya were used. Factor analysis was per- by tourists coming to Amasya. In this factor, there are formed based on the data obtained from the questions religious beliefs, dressing, money spending, the diversity delivered. It was decided that some of the propositions of languages and behaviour contrary to the traditions of were not suitable and were excluded from the list, ac- the local people. cording to the results of the factor analysis. The remain- The third factor, Positive Thoughts against Tourists ing four factors have emerged about the concept. These (FK3), is intended to test the presence of any admiration are the local people’s threat perception for tourists to the thoughts for tourists. The third factor positive thoughts socio-cultural values (FK1), being in negative thoughts (FK3) are also intended to test whether there is any ad- against tourists (FK2), positive thoughts for tourists miration expressed by the locals for tourists. (FK3) and the way to communicate with tourists (FK4). The last factor, Contact Forms (FK4), is intended When the KMO test sample size (0.841) is observed, to test whether the local people make connection with the factor analysis can be used for these data. However, tourists. This factor includes how the local population sigma = 0.000

Table 6. Rotated component matrix(a) Variables 1 2 3 4 Change of religious values 0.807 Change of customs and tradition 0.834 Change of the principle of solidarity that allows the society’s unity 0.813 Change in the value related to sexual life 0.832 Change of language 0.751 Change of attitudes about family 0.846 The differences in their religion 0.622 Have different dressed 0.687 Spending less money 0.628 Have different languages 0.697 Free behavior 0.672 Different clothing 0.732 Good Humored 0.822 Modernity 0.816 Being polite 0.863 Keep the environment clean 0.701 Random conversations 0.669 Sitting down to talk 0.851 Business talk 0.679 Seeing as Guest 0.656 Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. Rotation converged in 5 iterations. 22 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Reliability Statistics that tourism development doesn’t seem to reach certain saturation. However, the results give some tips about The value of Cronbach’s Alpha was obtained by the the local people threat perception from the tourist. Ac- reliability test for 4 factors that has got 20 questions in cording to the variables, they firstly feel the threat in the the survey to demonstrate the local people’s perception change of values related to sexual life (Mean=2.80) and of the tourist and how they treat the tourist seems to be secondly, change in the tradition and customs. It seems 0.838. that they do not participate in changing the principle of solidarity that allows the society’s unity (Mean=2.52). Table 7. Reliability statistics According to the results, the threat perception is for family structure more than for social structure. Cronbach’s Alpha Cronbach’s Alpha Based on Standard- N of Items ized Items Native people’s perception of tourist behaviour (FK2).

0.838 0.829 20 In this factor, some questions such as “religion differences”, “different clothing”, “spending less money”, It is understood that the reliability of the survey “The differences in their language” were asked to the na- questions is 83%, as shown in Table 4. tive people to test whether they were disturbed by tourist behaviour. Cronbach’s alpha values of factors were found to be 0.851. Local People’s Threat Perception for Tourists to the Socio-Cultural Values (FK1) Statistical data for the factor (FK2) and reliability values were given in Table 8. When we look at the reliability of the data analysis, overall average reliability rate It is possible that the local people can see the tourist seems about 0.851. Cronbach’s Alpha if Item Deleted as a threat to their own values to certain extent. This value for spending less money is 0.855. This proposition situation can be the result of the regional tourism de- seems not to be fully understood by respondents. velopment and the local people feel some negative per- The native people seem to be indecisive about which ception from the tourists. Cronbach’s alpha values of tourists can bother them. This situation is due to the factors were found to be 0.926. That means the factor’s local people not having enough information about tour- reliability percent is about 92 %. ism and also the lack of contact with tourists and the In this section of the study, some proposition was tourism industry. However, they seem not to think that offered to test whether they feel any threat related to the tourists’ religious affiliations and dressing disturb tourists. It seems that there is no exact threat percep- them. It shows that local people tolerate different reli- tion for Amasya’s local people from tourist. That means gions and beliefs.

Table 8. Descriptive statistical data about the threat related to tourists Cronbach’s Alpha Variables N Minimum Maximum Mean Std. Deviation if Item Deleted

Changes in the value related to sexual life 461 1 5 2.80 1.267 0.914

Change of Customs and Tradition 473 1 5 2.73 1.278 0.908

The changes of attitudes about family 460 1 5 2.71 1.273 0.907

The change of language 470 1 5 2.62 1.224 0.918

Change of religious values 487 1 5 2.62 1.312 0.913

Change the principle of solidarity that 453 1 5 2.52 1.189 0.912 allows the society’s unity

Valid N (listwise) 426

23 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Admiration of Local People against Tourists (FK3) iour. At the same time, modernity and being polite were also appreciated by the respondents. The native people In the first years of tourism development in the area, seem to like tourists and it shows that the development general admiration against tourists is in the foreground. is at early stage in the region. At this stage, it is aimed to put positive thoughts of the local people about tourists. To determine the most pop- Communication Forms with Tourists (FK4) ular behaviour of the tourist for native people, propositions “friendly become”, “to be modern”, “to be polite” The question, “How do you communicate with tour- and “the keeping environment clean” were asked to the ists coming to Amasya?”, was asked to local people in participants. Cronbach’s alpha values of factors were order to test their communication forms with tourists found to be 0.799. FK3 reliability rate seems to be about and the propositions such as “Randomly conversations, 79% and it is understood to be of medium rate. “Sitting down to talk”, “Business talk” and “Seeing as According to the data, the native people living in Guest” were offered to the participates. FK4 reliability Amasya consider tourists sensitive to the environment ratio is 53%. It can be said that the FK4 reliability ratio and good humoured as those with most favourite behav- is at a low rate.

Table 9. Descriptive statistics on the tourist factors disturbing the local population Cronbach’s Alpha if Item Variables N Minimum Maximum Mean Std. Deviation Deleted Spending less money 443 1 5 3.00 1.357 0.855

Free behavior 448 1 5 2.96 1.451 0.819

Have different languages 430 1 5 2.75 1.323 0.831

Clothing 444 1 5 2.67 1.402 0.811

Differences in their religion 428 1 5 2.48 1.344 0.815

Different clothing 413 1 5 2.42 1.229 0.834

Valid N (listwise) 386

Table 10. Descriptive statistics about the behavior of their favorite (positive thoughts) Statistics Variables N Cronbach’s Alpha if Item Minimum Maximum Mean Std. Deviation Valid Deleted Good Humoured 472 1 5 4.27 0.851 0.735 Modernity 431 1 5 3.99 1.011 0.711 Being polite 442 1 5 4.16 0.919 0.724 Keep the environment clean 466 1 5 4.21 0.914 0.783 Valid N (listwise) 418

Table 11. Descriptive statistical data related to the communication form with tourists (contact form)

N Cronbach’s Alpha if Variables Mean Std. Deviation Minimum Maximum Valid Item Deleted Randomly conversations 456 3.71 1.100 1 5 0.454 Sitting down to talk 424 3.25 1.240 1 5 0.362 Business talk 418 2.51 1.210 1 5 0.325 Seeing as Guest 412 2.72 1.294 1 5 0.399 Valid N (listwise) 410

24 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Amasya’s local people seem to communicate with When the communication mode of the local popula- tourists largely in the street. Besides, that business com- tion in Amasya with tourists is observed, it takes place as munication while serving tourists is the second most incidental and communication predominately occurs in common type of communication. That means that the the street. Besides, it is understood that secondly com- local people communication with tourists is weak and is munication type is the business communication while not sufficiently developed in the tourism sector. serving tourists. The local people communication with tourists seems to be weak. That means that the local people confrontation with tourists is non-existent or very Conclusion low. It can be understood that the tourism development is insufficient in the region and also not common. Tourism development exerts positive or negative ef- According to the obtained data, the local people of fects on the local population in the areas of tourism de- Amasya do not percieve any threat from the tourists. velopment. These effects can be described as economic, However, it is understood that they feel a certain level socio-cultural and environmental. As with any develop- of admiration towards the tourists. It is understood that ing industry, it is aimed at understanding the impact of there is no expected level of contact with tourists. This tourism on the local population. The local community can be based on the local people’s language differences can develop behavioural models according to the level and/or tourists do not stay enough in the region. The of tourism development in the region. The local com- statistics show that the accommodation rate in the re- munity models formed by the tourism development can gion is rather low. indicate the level of tourism development of the region. According to Butle’s theory, it is understood that This study aims to determine how the local people tourism in the region is at development stage.. In this develop an attitude towards tourists. At the same time, respect, taking account of local people’s perspective is tourism development level in Amasya region can be pre- of paramount importance. For healthy tourism devel- dicted according to the result of the study. Below are opment, the local people participation in the tourism given the results of the study. sector should be encouraged and social activities can be The local people in Amasya are unstable in terms of increased to give a chance to the local people to commu- threat perception of socio-cultural values by tourism. nicate with tourists. At the same time, tourism develop- This is due to a large proportion of the local population, ment effort and politics should be to spread tourism to lack of interest in tourism or lack of direct contact with the locals. Tourism and regional tourism research can tourism activities in Amasya. At the same time, it can be planned at the secondary school level, while voca- be said that tourism development in the region seems tional tourism training can be applied at the public level. insufficient. It also shows the development politics in the region due to the lack of social tourism awareness. References For the local people’s negative attitudes toward tourists, there is no exact and very evident attitude that Andereck, K., Valentine, K.M., Knopf, R., & Vogt, C. disturbs the native people. It shows that the native peo- (2005). Resıdents’ Perceptions Of Community ple in the region don’t have enough information about Tourısm Impacts. Annals of Tourism Research, regional tourism activities and have little contact with 32(4), 1056-1076. tourists. This shows two results for the region. One of Andrew, L. (2007). Residents’ attitudes towards tourism in them is tourism development and the activities stay in Bigodi village, Uganda. Tourism Management, 28(3) the too narrow area. Another one is that tourism de- 876-885. doi:10.1016/j.tourman.2006.03.004 velopment in the region is not adequate. However, the Besculides, A., Lee, M., & McCormick P.J. (2002). Resi- idea that tourists can disturb them by being of differ- dents’ Perceptıons Of The Cultural Benefits Of Tou- ent religious affiliations seems to oppose. This shows rism. Annals of Tourism Research, 29(2), 303-319. that they are tolerant towards the people of different Butler, R.W. (2011). Tourism Area Life Cycle. Retrieved Sep- religions and beliefs. tember 21, 2016, from http://www.goodfellowpublis- hers.com/academic-publishing.php?content=home Admiration of the local people for the tourist seems Çalışkan, U., & Tütüncü, Ö. (2008). Turizmin Yerel Halk high. They like when tourists are sensitive to the envi- Üzerindeki Etkileri ve Kuşadası İlçesi Uygulaması, ronment, being nice and modern. This means the crime Tourism’s Effects on Local People and Kuşadasi against the tourist would be low. It also shows that Pattern, IV. Lisansüstü Turizm Öğrencileri Araş- Amasya seems a safe place for tourists. tırma Kongresi, 23-27 Nisan 2008, Belek, Antalya 25 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Claudia, J., & Gursoy, D. (2004). Distance Effects on Resi- Kuvana, Y., & Akan, P. (2005). Residents’ attitudes to- dents’ attitudes Toward Tourism. Annals of Tourism ward general and forest-related impacts of tourism: Research, 31(2), 296-312. the case of Belek, Antalya. Tourism Management, 26(5) 691-706. doi: 10.1016/j.tourman.2004.02.019 Gursoy, D., & Rutherford, D.G. (2004). Host Attitudes Turkish Culture and Tourism Ministry. (2015). Statistics. Toward Tourism An Improved Structural Model. Retrieved September 21, 2016, from http://www.kt- Annals of Tourism Research, 31(3), 495-516. byatirimisletmeler.gov.tr/TR,9853/istatistikler.html Kim, K., Uysal, M., & Sirg, M.J. (2013). How does tourism Upchurch, R. S., & Teivane, U. (2000). Resident per- in a community impact the quality of life of com- ceptions of tourism development in Riga, Latvia. munity residents? Tourism Management, 36(2013), Tourism Management, 21(5), 499-507. doi:10.1016/ 527-540. doi:10.1016/j.tourman.2012.09.005 S0261-5177(99)00104-1

26 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Key issues on Tourism Destination Competitiveness

Understanding digital consumers in tourism

Radmila Živković, Abstract: Digital age has triggered numerous changes and innovations in the corporate Ivana Brdar, sector. The rapid advancement of information and digital technologies has Jelena Gajić, brought about diverse benefits to tourism industry, thus enabling tourism en- Jelena Stanković terprises to enhance the overall quality of their services and maintain successful customer relationships. Also, wide Internet accessibility has fundamentally altered the manner in which tourists collect and share information, organise Singidunum University, travel, and in particular, how they share their valuable travel experiences. Belgrade, Serbia From the business perspective, contemporary tourism trends are primarily oriented towards consumers. Digital communication has become one of the main prerequisites for successful business performances, bearing in mind the growing Internet use and considerable number of consumer addicts. The development and implementation of mobile technologies and applications plays an important role in the overall tourism development, and has contributed to development of the special form of tourism business- smart tourism. The aim of this paper is to identify the change of value among the new, so-called digital consumers. The research results indicate that the identification of specific needs of digital consumers has led to diversification of tourism products and services and new and adjusted communication. Accordingly, it is necessary to ensure integrated application of new technologies, adjusted business processes and efficient cooperation among all employees in the company in order to successfully manage customer relationships. Keywords: digital consumers, mobile digital technologies, quality, smart tourism, tourism services.

Introduction

Digital or online consumers belong to the generations of consumers born after the 80s of the XX century, where digital technologies are widely accessible and consumers possess skills needed for their proper use. Those generations, which fully adopted and implemented digital communication, are also known as „Y„ generation’’ (McDaniel et al., 2013; Tapscott, 2009). The lifestyle of such consumers, excessive Internet consumption, as well as the daily use of digital networks has triggered the emergence of new categories of consumers, and generated new business models. They Correspondence: primarily seek transparency, which means that the companies should ad- Ivana Brdar just their values to the propaganda and advertising modes, or else they e-mail: would be less valued by the consumers, who manage perfectly competi- [email protected] tive markets. Modern consumers possess extensive experience, are aware 27 Sitcon 2016 Doi: 10.15308/Sitcon-2016-27-32 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

of their own needs, demand value for money and have who manage a perfectly competitive market. Due to the more multifaceted requirements. Also, one of their main rapid technological advancements, information is avail- characteristics is greater application of information tech- able via different devices. Consumers have access to up- nologies in the decision-making process when purchas- dated and legitimate information, and do not rely solely ing. The basis for meeting their needs is the provision on the information provided by tourism companies. of quality services, which are continuously improved Online consumer communities, such as Trip Advisor or and innovated, with special emphasis on the necessity Peer to Peer Travel Review, mutually exchange experi- of IT implementation. Tourism offer is faced with the ences and opinions through debates. A two-way com- challenges in terms of adjustment to individual needs of munication triggered by the Internet took the monopoly tourists, and thus transforms from being mass-market over information. Brand is now in the phase of adjust- oriented to the one that is varied and oriented towards ment and monitoring the needs of consumers with the the needs of individual users. Modern tourists posses the aim to gain their loyalty and maintain successful com- following characteristics: they are oriented more towards munication (Li & Zhang, 2002). learning, adventure and experiences; more flexible and In order for a consumer to react, i.e., purchase a independent (modern tourists create the need for better product, service or see the products on the website of quality, greater value it gets for the money and greater some brand, he/she needs to be aware of such act, which flexibility on travel); interested in consistency and ready could be achieved through complex impact of some per- to pay more; interested in life and participate in the life sonal characteristics and emotions that could be trig- of the local cultures; demand different types of tourism, gered by various stimuli to trigger emotional reaction such as cultural heritage tourism, rural tourism, medi- (Chaudhuri, 2006, pp. 108-117). Marketing managers cal tourism, spa tourism, sports tourism, rafting, hiking, are challenged to discover part of personality, either pri- volunteering tourism, bird watching, shooting, visiting vate or social, that triggers emotional states that lead to national parks, golf tourism, cruising, fishing, education, certain favourable behaviour towards the given brand, city tourism etc.; they are more stressed and seek relaxa- and whose characteristics and messages contribute to tion and benefits; are well conversant with technology the recognition of own values among consumers. and frequently use it for booking and purchsing tourism Solomon & Bamossy (2006) state that the research products; care more for health and security (Pirnar I., on consumer behaviour and consumerism conducted Icoz O., 2010). in the USA indicates how the consumers observe their consumer activity. UNDERSTANDING ◆◆ Consumption as an experience - it occurs when DIGITAL CONSUMERS the goal of consumption is to achieve or encourage some personal experience, emotions. Digital or online consumers belong to the generation of consumers born after the 80s of the XX century, emOtiOnS with widely accessible digital technol- StimULi mental excitement ogies and consumers who are able to Spontaneity properly use such technologies. Subjective experience The generations born after the 80s are adjusted to digital communication, aWareneSS PerSOnaL and are also known as “Y” generation COnCePt BeHaViOUr assessment (McDaniel et al., 2013; Tapscott, 2009). Understanding Personal aspect Their lifestyle and excessive Internet Labelling Social aspect consumption have generated new

business models and new categories PerSOnaLitY of modern consumers. They primarily DeVeLOPment seek transparency, which means that Personal characteristics the companies should harmonise their Previous experiences values with advertising and propaganda, or else they could be considered as Figure 1. Emotional communication and personal concept less valued in the eyes of consumers, Source: Chaudhuri, A. (2006, p. 95) 28 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

◆◆ Consumption as belonging - consumption, use of ADJUSTING TOURISM COMPANIES products as the acceptance of values and brand TO DIGITAL CONSUMERS symbolism. ◆◆ Consumption as categorisation - where consum- Tourism is a social life sphere that is considerably ers enter certain category or classification based affected by communication and information technolo- on the use of products and services of the pre- gies, and tourism activities are the frequent topic within ferred brand. online communities, in particular during the produc- ◆◆ Consumption as a game - consumers are in- tion stage (Živković et al., 2014; Boyd & Ellison, 2008; volved in creating public experience of brand Bosangit, Dulnuan, & Mena, 2012; Banyai & Glover, through participation, support, comments in 2012; Huang et al., 2010; Litvin et al., 2008). The average consumer communities. length of membership or participation in online com- An online consumer seeks to get informed via the munities is 4.5 years, and about 54% of users is active Internet, but due to the vast amount of information, that on those profiles on a daily basis. They use them to es- process might be quite confusing and tiresome. In the tablish personal contacts and contacts with present and traditional purchasing process, a consumer is affected potential business partners. Lebo (2013) believes that by numerous information that is confidential at the pur- the impact of various social media channels is the most chasing moment, since the consumer can see and check significant in terms of achieved business effects with the quality of products. One of the factors affecting the 64%, while the impact of web sites accounts for 84%. online purchasing decision is the way in which the pur- In order to respond to the demands of modern tour- chasing process is regulated, its payment mode, way of ists, Nunes et al. (2013) state that special business mod- ordering, delivery, service, relationships with consumers els should be developed through: (Kardes et al., 2011). Online consumers that use web, i.e., dotcoms to collect information and purchase can be 1. Information strategy - the companies analyse the divided into five categories of online users that differ in previous behaviour of consumers and their pur- terms of behaviour and way of using web pages: direct chasing habits, and based on that change their information seekers, indirect information seekers, buy- relationship with suppliers and distributors. ers, occasional buyers and entertainment seekers (Chaf- 2. Consumer interaction platforms - the company fey, 2010, pp. 492-493; Laudon and Traver, 2009). uses these platforms to stimulate communication Modern consumers form their opinion on the com- between consumers and enables them to directly panny and its products and leave comments by joining communicate with the company through online online consumer groups, through forums, emails, and communities. chat groups. Consumer associations, established on so- 3. Different business models - consumers demand cial networks are a new way of communication among from companies to fully adjust to their needs consumers, and a source of information for brands. through implementing models that enable them Such consumer communities can exist on the relation to rent products and return them if they fail to consumer-consumer, as well as between companies and meet their expectations. Well-known brands are consumers, or just between companies. In compliance also susceptible to this trend and oriented to- with the market needs, Chaffey (2010) developed various wards new needs of consumers. types of communities on the relation company- consum- Corporate Social Responsibility - consumers expect er and communities among various companies, from the the company to pay attention to its business model and point of: be responsible to all participants-partners. To create ◆◆ Benefits - among consumers going through the value and be innovative and stimulating for consumers. same processes or attempting to achieve the same Customer Relationship Management plays an im- goal. portant role in the process of business digitalisation- ◆◆ Position - for consumers that belong to the same an old business concept that is becoming up-to-date category according to some criteria such as age, due to the emergence of new technologies that not only certain status, lifestyle. support it, but also impose as a necessary solution for ◆◆ Interests - for consumers with the same or similar successful business performances. Thus, considerable interests. attention is nowadays devoted to Customer Relation- ◆◆ Profession - particularly important for the compa- ship Management (CRM) concept, i.e., managing long- nies operating in the same field. term customer relationship. It is well-known that CRM 29 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

combines the business strategy and technology with the In order to ensure the development of high-quality aim to identify, attract, and retain long-term relation- tourism offer, there is the strong necessity of establish- ships with consumers through value achievement. CRM ing modern and efficient infrastructure that would en- implies being familiar with strategic management and sure accessibility and mobility. Accordingly, an inno- Internet technologies, and aims to identify the possibili- vative approach to tourism emerged - so called smart ties for establishing profitable customer relationships, tourism, which supports new digital technologies and as well as to maintain and retain such relationships is oriented towards enhancement and simplification of (Živković, 2010, pp. 172-173). Based on the research tourism experience (Palumbo, 2015; Ferri et al., 2014). conducted in the tourism industry, it can be noticed that In the modern digital era, one of the most significant CRM represents a source of competitive advantage only ways of communication between tourism supply and when the activities of the concept are directed towards demand is the use of mobile applications. This enables planning and implementation of marketing strategy. tourists to collect all relevant information when organ- Practically, CRM technology enables the companies to izing travel, but they also enable all participants in tour- plan and implement efficient marketing activities with ism supply to promote their offer and facilitate commu- the aim to improve the ability of companies to maintain nication with customers (Mišković et al., 2015). Since profitable customer relationship. Moreover, in the com- mobile applications can offer various types of services petitive environment, CRM has become the key market- to customers, Mišković et al. (2015) and Bendon et al. ing niche for achieving profitable business performances (2010) claim that they can be divided into eleven main (Mohammed & Rashid, 2012). groups: Due to the development of innovative information 1. Transport planning applications - they enable technologies, new possibilities emerged for the efficient tourists to keep track of all information on the process of collecting and processing vast amount of data. preferred means of transport, most often plane, However, it is necessary to establish integrated applica- in the real time. Also, all available information is tion of new technologies, adjusted business processes shared, which facilitates change and development and efficient cooperation of all employees so as to suc- of alternative arrangements in case of unplanned cessfully manage customer relationships. Along with travel circumstances (Trainline, Flight track). the Internet advancement and incessant technological 2. What’s On guide/Event listing apps - these ap- development, it is possible to state that CRM has en- plications enable downloading or posting in- tered a new development phase. The growth of informa- formation on the events and activities at certain tion and communication technologies has triggered the location, with the possibility of rating/ giving rec- emergence of so-called e- Customer Relationship Man- ommendations for some place or event. They can agement (eCRM). eCRM can be defined as a business enhance the feeling of spontaneity among tourists, strategy that utilizes Internet technology and enables the encourage new forms of socializing, and together hotels to connect with their guests via fierce, personal with eWOM, intensify the feeling of authenticity and mutually beneficial interaction, which should ensure and deeper interaction at the destination (Buzzd). profit increase and efficient sales (Milović, 2012). 3. Travel planner apps - these applications have From the CRM perspective, the Internet is a means of the role of creator of integrated travel plan that interaction with customers, which brings numerous ben- includes car renting, booking flights and hotels efits to the organisation. Creating and maintaining cus- and restaurant seats, and are synchronized with tomer loyalty implies that the company perceives the In- the user’s personal calendar. They perform the ternet as an environment oriented towards the customer, role of traditional travel organizers and enable who needs to be less treated as a target, and more as a users to independently organize their travel via partner (Stockdale, 2007). Tourism enterprises need to the Internet (TripIT, Tripcase, TripDeck). have a good eCRM strategy, considering that nowadays a 4. Accommodation planning apps - these applica- great deal of communication with customers is done via tions function as LBS (location-based service) the Internet, no matter if it is a website, social network tourism information center, which provides ac- or some other digital media. A good eCRM strategy can commodation booking services. The users are bring numerous benefits to the company such as increas- able to locate the nearby hotels, compare prices, ing the service value for customer, increasing the quality give reviews and book the preferred accommoda- of services, advertising costs reduction, strengthening tion. They should help the users to collect infor- loyalty and spreading of the popular eWOM. mation, reduce the time needed for travel organi- 30 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

zation and increase flexibility and possibility of 11. Social-networking apps - these applications en- choice (Hotels.com). able customers to share with their friends travel 5. Tour guide apps - they mostly imply city guide- information, photos and experiences. They can books that contain recommendations for res- generate new forms of destination management taurants, stores, attractions and nightlife. They (Facebook, Twitter). replace paper guidebooks and give additional The value chain in digital economy is part of the value as they are constantly being updated. They digital eco-system in its broadest sense and has the po- are quite easy to use and provide good value for tential to take on the role of the global leader in the key money (UK Travel guide, NY Travel guide). industry sectors and under proper conditions. Globali- 6. Directional services - provide satellite naviga- sation has triggered tourism development in various tion software designed for mobile platform, or forms. The rapid advancement of electronic technology, the simple service of using maps so that the users communications and transport has provided new meth- would not get lost at the destination. They can ods for tourism growth and development. offer simple solutions to tourists who are circulating through certain city or destination, and Conclusion provide various information on distance, location etc. (Google maps). The modern era and the incessant and rapid pace of 7. Location based social-networking apps - these life have led to an increased need of digitalization and applications can offer significant possibilities to electronic communication. Namely, the things that were tourists, they help them find friends and other almost unimaginable to us just a few years ago, have contacts at the destination and discover new ways made our present lives much easier, but have also led to experience the destination. This can strenght- to alienating people from their natural environment. en the feeling of connection with the destination The rapid growth of the Internet has brought about and lead to more authentic experiences. The users new possibilities in the tourism field, such as innova- check in at certain location and share information tive product development, greater number of potential on their location and activities with others. The clients, creating new value for consumers. In order to users can win awards and participate in games, enable a tourism company to successfully manage its which would ensure additional value for guests/ business activities and performances, it is essential that customers (Foursquare). it assumes the same position as its present and potential 8. Attraction apps - these applications are mostly buyers. The power of digital media lies in the possibil- developed to provide more interactive and bet- ity of maintaining good relationships with the present ter experience to tourists at certain location. For customers, which would also enable hotel companies to instance, „London Museum Guide“offers its us- attract new customers. Finally, it is worth noting that ers the possibility to place mobile device camera the importance of digital technologies in both personal in front of certain artefacts and instantly get ad- and business sphere will maintain a growing tendency, ditional info on those artefacts and gain high- which would considerably affect the principles of doing quality experience (ThrillSeeker). business in the tourism market. 9. Company specific apps - these applications enable users to access and manage their reserva- References tions and other information that company has about them. Airlines can provide boarding cards to their customers on mobile devices. They can Banyai, M., & Glover, T. D. (2012). Evaluating research be very useful for the companies for efficient cus- methods on travel blogs. Journal of Travel Research, 51(3), 267-277. tomer relationship management (Lufthansa). Bendon T., Hunsdon S., & Grieve C. (2010). Our mobile 10. Tourist assistance apps - this type of applications future: how smartphones will transform visiting ex- provides support services to tourists, including periences, Horizon Digital Economy Research: Lon- the voice translation service for mobile devices don. and translation via camera on the mobile device. Bosangit, C., Dulnuan, J., & Mena, M. (2012). Using trav- These services can facilitate travel and provide el blogs to examine the postconsumption behavior new possibilities for interaction (eCurrency, lan- of tourists. Journal of Vacation Marketing, 18(3), guage translator). 207-219. 31 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Boyd, D., & Ellison, N. (2008). Social network sites: Defi- Milović, B. (2012). Social Media and eCRM as a Prereq- nition, history, and scholarship. Journal of Com- uisite for Hotel Success. Management Information puter-Mediated Communication, 13(1), 210-230. Systems, 7(3), 26-31. doi:10.1111/j.1083-6101.2007.00393.x Mišković I., Holodkov V., & Radin I. (2015). Upotreba Chaffey, D. (2010). E–Business and E–Commerce Man- mobilnih aplikacija u promovisanju turističke po- agement Strategy, Implementation and Practice. Es- nude zaštićenih delova prirode. Novi Sad: Fakultet sex: Pearson Education. za sport i turizam. Chaudhuri, A. (2006). Emotios and Reasons in Consumer Mohammed A. A., & Rashid B. B. (2012). Customer Re- Behavior. Oxford: Elsevier. lationship Management (CRM) in Hotel Industry: Ferri, M.A., Dominici, G., Basile, G., & Aiello, L. (2014). A framework Proposal on the Relationship among Cultural Product Management from Environment CRM Dimensions, Marketing Capabilities and Ho- to Territorial Context: Configuration of the Main tel Performance. International Review of Manage- Relationships. In L. Aiello (Eds.), Management of ment and Marketing, 2(4), 220-230. Cultural Products: E-Relationship Marketing and Nunes, P.F., Yardley, S., & Spelman, M. (2013). Growth Accessibility Perspectives (pp. 22-40). from Consumer Behaviour Change in Developed- Huang, C., Chou, C., & Lin, P. (2010). Involvement theory Market Economies. Retrieved August 28, 2016 from in constructing bloggers’ intention to purchase trav- http://www.accenture.com/sitecollectiondocu- el products. Tourism Management, 31(4), 513-526. ments/pdf/accenture-despair-growthconsumer- Hudson, S., Roth, S. M., & Madden, J.T. (2012). Customer behaviour.pdf Communications Management in the New Digital Palumbo, F. (2015). Developing a new service for the Era. Retrieved August 28, 2016 from https://www. digital traveler satisfaction: The Smart Tourist App. scribd.com/document/160660725/Customer-Com- The International Journal of Digital Accounting Re- munications-Management-in-the-New-Digital-Era- search, 15(2015), 33-67. January-2012 Pirnar, I., & Icoz, O. (2010) The new tourist: impacts on Kardes, F., Cronley, M., & Cline, T. (2011). Consumer Be- the hospitality marketing strategies. Amsterdam: havior. Mason: South-Western Cengage Learning. EuroCHRIE. Laudon, K.C., & Traver, C.G. (2009). E-Commerce Busi- Solomon, M., Bamossy, G., Askegaard, S., & Hogg, M.K. ness, Technology, Society. New Jersey: Prentice Hall. (2006). Consumer Behaviour: A European Perspec- Lebo, H. (2013). The Digital Future Project 2013: Survey- tive. Essex: Pearson Education. ing The Digital Future. Los Angeles, CA: Center Stockdale, R. (2007). Managing Customer Relationships for the Digital Future. Retrieved August 28, 2016 in the Self-service Environment of e-Tourism. Jour- from http://www.digitalcenter.org/wp-content/ nal of Vacation Marketing, 13(3), 205-219. uploads/2013/06/2013-Report.pdf Tapscott, D. (2009). Grown up digital: How the Net gener- Li, N., & Zhang, P. (2002). Consumer Online Shopping At- ation is changing your world. New York: McGraw- titudes and Behaviour: An Assessment of Research. Hill. Retrieved August 27, 2016 from http://melody.syr. Živković, R., Gajić, J., & Brdar, I. (2014). The Impact of edu/pzhang/publications/AMCIS02_Li_Zhang.pdf Social Media on Tourism. Impact of Internet on Litvin, S. W., Goldsmith, R. E., & Pan, B. (2008). Elec- Business Activities in Serbia and Worldwide / Sin- tronic word-of-mouth in hospitality and tourism gidunum University International Scientific Con- management. Tourism Management, 29(3), 458- ference Sinteza 2014 (pp. 758-761). doi:10.15308/ 468. SInteZa-2014-758-761 Lamb, C.W., Hair, J.F., & McDaniel, C. (2013). MKTG. Živković, R. (2010). Ponašanje i zaštita potrošača u tu- Beograd: Data Status. rizmu. Beograd: Univerzitet Singidunum.

32 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Key issues on Tourism Destination Competitiveness

TOURISM AS A PUZZLE IN THE PROCESS OF IMPROVEMENT OF CREATIVE ECONOMY

Nikica Radović, Abstract: This paper attempts to perform the analysis of the role of tourism in the process Danica Čigoja Piper of strengthening the creative economy. Creative economy is defined as a specific approach to development of the economy based on the synergy of economy, Singidunum University, culture and technology. It aims to improve the economic and sustainable devel- Belgrade, Serbia opment of the country and link various creative industries (design, discography, media, cinema, publishing etc.) through their commitment and contributions so as to achieve favourable results. Having in mind the strength of tourism as an economic activity, in terms of generated revenues and the number of employed population, it is important to analyze this segment of economy and highlight the tourism share in development of creative economy and sustainable development. The authors shall attempt to explain the impact of tourism on the development of state economy and the role of creative economy in the tourism field.The paper shall also elaborate on the effects of creative economy on the position and tourism destination recognition.

Keywords: creative economy, tourism, creative industry, destination competitiveness.

Introduction

The concept of “creative economy” was developed by a British analyst and theorist John Howkins (2001). He introduced it into contemporary theoretical flows with an argument presented in the book titled “Creative Economy – How People Earn on Ideas” emphasizing three main elements of creative economy: creativity as an idea that can be economically valorized; creative products are the result of creative work and creative activity (Mikić, 2008). Creative economy represents the unbreakable bond between creativity and economy, with the possibility to valorise the value of created products as the economic good or service. According to the report of the UNESCO (2013), creative economy is based on the share and exchange of cultural values, tradition, knowledge and skills between the creator (the producer) and the user (consumer). Creative economy is treated as the mixture of art, science and technology with the formation of a num-

Correspondence: ber of creative industries within it. Nikica Radović Creative industries represent a number of occupations based on skills, e-mail: talents and creativity and they include: architecture, design, publishing, com- [email protected] munication technologies, fashion, film, video and photography, software, 33 Sitcon 2016 Doi: 10.15308/Sitcon-2016-33-36 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

computer games, toys, music, visual and performing arts, assumes the first place in terms of exports (UNWTO, crafts, advertising, radio, television, and according to the 2016). It is expected that this sector shall record con- UNESCO report, in some countries, cultural tourism as siderable improvements in the following twenty years. well (Jovičić & Mikić, 2006., p.18). It is interesting to men- At the same time, it is estimated that these will be the tion that culture and creative industry are sometimes inter- decades in which tourism will be the main initiator of twined. This particular connection is what opens the pos- economic growth, investments, general improvement sibility for strengthening the creative sector in numerous in the society and environmental sustainability (Petko- economic fields, mostly in the tourism sector. vic & Pindzo, 2012). Such developmental path includes Today’s creative industries are taking hold of and the involvement of tourism in the development of crea- are becoming the initiator of economic development in tive economy, on both national and global level, and the numerous countries owning to the specific functioning return benefit which will be reflected in the influence of of these industries, as well as fast development of crea- the stronger creative sector on ensuring stable tourism tive activities. Namely, in these business areas, produc- development. tion is based on creativity and inspiration, following the Tourism as a profession has the fastest growing in- “just-in-time” principle. Economic contribution of crea- dex with a great potential for further growth and new tive industries is reflected in a number of economic and investments, no matter which world destination is con- non-economic effects, such as: export revenue, new job sidered. With the possibility to attract new investments, openings, development of information-communication tourism is the business sector which can rapidly activate technologies, strengthening of collectivism, creating the new job openings and engage people of various pro- individual opinion, branding the area etc. fessions. With the development of tourism and regular The contribution of creative economy on every level activities in this economic field, significant monetary is reflected in US $2.250 billion, thus the cultural and funds are collected. Tourism has both direct and in- creative industry make 3% of the world GDP and employ direct effects on the development of the rest of the 29.5 billion people worldwide (EY, 2015, p. 8). Accord- economy on the destination and its direct environment. ing to the UNCTAD report for the year 2012, creative Having in mind its importance for the destination to be economy actively participates in the inclusive develop- equipped with adequate infrastructure – to have good ment, and green industries are also important partici- roads, well supplied shops, developed IT network and pants of the creative economy, which participate in the support. Along with the development of the destina- encouragement of differences in terms of culture, ideas tion, some other branches such as traffic, commerce, and democratic attitudes and contribute to ensuring telecommunication etc. get financed. sustainable development. As a response to the growing According to the statistical data of the Ministry of importance of the creative economy and its occupations, Trade, Tourism and Telecommunications of the Re- certain countries have formed ministries responsible for public Serbia in 2015, foreign exchange inflow from this area. One such example is Indonesia where the Min- tourism increased by 9%, and it amounts €945 million. istry of Tourism and Creative Economy was formed, led In the first quarter of 2016, foreign exchange inflow was by the attitude that the economy, culture, arts and herit- €252 million. age are inextricably connected (Nirwandar, 2012). Tourism offer can no longer rely solely on the traditional tourism patterns (travelling for mere holiday and THE SYNERGY OF TOURISM AND CREATIVE ECONOMY relaxation purposes or sightseeing of certain landmarks without the specific theme). Namely, creative economy The concepts of creative economy and tourism de- should foster new types of offer, which would enable velopment are closely related. The essence of tourism tourism sector to experience fundamental changes stim- is travelling, stay and experience with certain amount ulated by creative mechanisms. of expenditure. According to the UNWTO (2016), the Today, there are special forms of tourism that are be- share of tourism in the world GDP is 10%, and every coming more and more interesting. Such is the so called eleventh citizen of the world is employed in the tour- thematic tourism which encompasses cultural tourism, ism industry. In 2015, international tourism revenue city tourism, village tourism, eco tourism, health tour- reached US $ 1,260 billion. When it comes to exports, ism and similar forms of tourism offer. In every form tourism holds the third place in the world, right after of thematic tourism, it is possible and desirable to use the export of fuels and chemicals and before the export one’s own inspiration, ideas and talents which indicate a of food and car products. In many countries, tourism strong connection between tourism and creative econo- 34 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Table1. Foreign exchange inflow from tourism in the Republic of Serbia

Year In millions of Euros In millions of US$ 2011 710 992 2012 708 906 2013 792 1,053 2014 863 1,139 2015 945 1,048 I quarter 2016 252 280 Source: Ministry of Trade, Tourism and Telecommunications of the RS my. This connection is most pronounced when it comes Pupin in the Historical Museum of Serbia in Belgrade, to cultural and city tourism. as well as the exhibition on life and work of Nikola Tesla City tourism is one of the tourism segments which in the Museum of Nikola Tesla. Both exhibitions follow records constant growth, and such movements are influ- the aforementioned global tendencies when preparing enced by the growing urbanization of the world popula- the exhibitions and thus present the mixture of historical tion, which is in search for new findings and experience. buildings, culture, design and information technologies, Tourists in the cities can spend time in various ways. which have a considerable impact on the appeal of the Thus, depending on singularity, position and role, the programme for local and foreign tourists, and therefore influence the attendance level. country forms types of world metropolis such as national capital cities, cultural capital cities, artistic cities, cities Creative sector development in tourism was particu- under the protection of UNESCO, creative, industrial, larly supported by the United Nations. UNESCO is the sport-oriented, festival and futuristic cities (Jovanović, organization of the United Nations which deals with 2015). cooperation in the field of education, science and culture. In their work, UNESCO handles cultural legacy and “The Network of Creative Cities” is the project UN- forms the list of the world heritage.That list includes five ESCO which refers to cities – places which can enable sites from Serbia: Old Ras and Sopoćani (since 1979), technology, talent and tolerance, and in return there is Studenica Monastery (since 1986), Medieval Monuments economic growth, i.e., the growth of the business re- in Kosovo and Metohija (since 2004 and 2006), Gamzi- sults.The idea is that, besides promotions, creative cities grad – Romuliana, Palace of Galerius (since 2007) and can exchange experience, obtain new knowledge. “The Stećci Medieval Tombstones Graveyards (since 2016). Network of Creative Cities”consists of cities themati- The wealth with cultural content and legacy is possible cally organized in the cities of crafts, literature, music, to use and realize in the flows of creative economy on the gastronomy, music, sport and other specific fields of in- national level. The examples are the projects “Refresh- terest of modern tourists. ing Memory” and “Easter Egg” (Čigoja & Radović, 2014) Cultural tourism is the primary form of tourism of where with the fragments from national culture and tra- special interests and it refers to learning about other ditions, that is, with the illustrations from monasteries people, their habits, customs, tradition and the way of usable elements can be created and by selling them, cer- living. The most frequently visited objects are the mu- tain income can be obtained. At the same time, a certain seums which are following curatorial trends more and mark of history or cultural legacy of a country is visible. more on the global level and are preparing more and Another interesting project is EU project “European more attractive contents (the inflow of new technologies Capital of Culture”, which is organized with the aim of is also noticeable, as well as the invitation for visitors to presenting cultural life and the domain of city culture. start the interaction with the setting). Great world exhi- Undoubtedly, it should lead to certain economic gain. bition spaces are not the only that provide active con- According to the report of the consulting agency “Palm- tribution to development of cultural tourism – cultural er Rey” hired by the European Commission to analyze institutions and tourism workers in Serbia are more and the capitals of culture for the period from 1985 to 2003, more engaged in work based on creative expression. The the results pointed out that for this type of promotion, settings that are currently popular and interesting in Bel- the return on every euro invested has gone up from €8 grade are the exhibition on the life and work of Mihajlo to €15. At the same time, with the growth of income 35 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

comes the growth of the number of tourists. Accord- tourism. The mere concept of tourism is creative, as this ingly, with the help of this strategy, Copenhagen noted branch of industry draws various pieces of information the growth of tourists by 11%, the city of Sibiu increased from different historical, cultural and social patterns the percentage of visits by 32%, and the well-known Bel- and combines them in their own unique way. In this gian city of Briz stored €213 million (Jasarović, 2015). way, creativity is generated, which encourages not only Becoming aware of the potential of the connection tourism sustainability and rise, but also creative econo- of creative economy and tourism opens the question mies as such. of development of new possibilities for cooperation of creative industries and tourism industry. Therefore, it References is necessary for cooperation among inter-sectors to be as strong as possible, in the private sector, as well as the Čigoja, D., & Radović, N. (2014). Uloga digitalnog mar- stimulation by the country. Governments play an im- ketinga u očuvanju kulturno-istorijske baštine Sr- portant role in encouraging the development of creative bije. Impact of Internet on Business Activities in tourism of the given country, including the development Serbia and Worldwide / Singidunum University of necessary infrastructure, as well as strengthening of International Scientific Conference Sinteza 2014. creative clusters in the economy (OECD, 2014). The us- Beograd: Univerzitet Singidunum. doi:10.15308/ age of new technologies confirmed useful knowledge SInteZa-2014-292-294 about the primary (tourist) field and inevitable coop- Ernst & Young. (2015). Cultural Times: The first global eration with the creative sector represent obligatory el- map of cultural and creative industries. Retrieved ements of contemporary tourism development. In the August 27, 2016 from http://www.ey.com/Publica- information age characterized by almost immeasurable tion/vwLUAssets/ey-cultural-times-2015/$FILE/ number of appealing contents, travel agents are sup- ey-cultural-times-2015.pdf posed to tell an adequate story in the most appealing Jasarović, E. (2015). Strategije razvoja lokalne kulturne way and offer the most attractive content to meet the politike u Crnoj Gori sa aspekta kreativne ekono- expectations of a great number of tourists. Moreover, mije gradova: doktorska disertacija. Beograd: FDU. it is the creative economy that enables the realization Jovanović, V. (2015). Tematski turizam. Beograd: Uni- of this goal. verzitet Singidunum. Jovičić, S., & Mikić, H. (2006). Kreativne industrije. Be- CONCLUSION ograd: British Council. Mikić, H. (2008). Kreativne industrije, dizajn i konku- The growth of creative economy leads to the advance- rentnost: proaktivan pristup. Beograd: CEI. ment of socio-economic growth of commerce and in- Nirwandar, S. (2012). Indonesia Tourism: Policy and novations. Through the exchange of national experience Strategy, VII Tourism Ministerial Meeting 2012. and implementation of certain strategies, it is possible Russia: Khabarovsk. to achieve even greater growth of creative economy. The OECD. (2014). Report: Tourism and the Creative Economy. programs of creative cities, European capitals and items OECD: Paris. on the UNESCO list influence the development and po- Petković, G., & Pindžo, R. (2012). Turizam i novi eko- sitioning of destinations, the level of tourist attendance, nomski izazovi. Ekonomika preduzeća, 60(1-2), and thus the increase in income. In this way, the recipro- 117-126. doi:10.5937/ekopre1202117P cal relationship of tourism and creative economy is once UNCTAD Report (2012). Geneva, Switzerland again implied. Their connection is imminent and quite UNESCO Report (2013). New York: UN necessary in the 21st century. It is virtually impossible UNWTO Tourism Highlights (2016). to imagine tourism development without the inflow http://www.e-unwto.org/doi/book/10.18111/97 of positive impulse and active development of creative 89284418145,preuzeto 05.08.2016.

36 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Key issues on Tourism Destination Competitiveness

Technological development and sharing economies: implications on tourism destinations

Miloš Ničić1, Abstract: 2 Contemporary digital age is relying upon constant changes in the ways new Sanja Iguman technologies are used in forming authentic forms of networking. Taking into the account the development of sharing economies and their impact on the 1University of Belgrade, hospitality accommodation market, this paper will bring forward the processes Belgrade, Serbia through which informal short-stay accommodation units are articulated into 2Bergamo University. museum spaces that bring multiple benefits to tourism destinations. Bergamo, Italy Keywords: sharing economy, Airbnb, museum, accommodation units.

Introduction

In this paper, we attempt to shed light on certain cultural practices that are tightly linked to the specificities of the modern society, often identified as Digital era or Information age. As Castells (2011a) notes, it is considered to be the era of contemporary capitalism in both political and cultural dimensions, characterized by globalization as a trend heavily relying on the advancements of technology and networking (Steger & James, 2010), with consumerism practices in its core (James & Szeman, 2010). Another noteworthy feature of the contemporary society is networking, articulated through various systems of socio-technological practices that set the tone of the contemporary life. Though networks are well established forms of communication, digital networking „powered social and organizational networks in ways that allowed their endless expansion and reconfiguration, overcoming the traditional limitations of networking forms of organization to manage complexity beyond a certain size of the network” (Castells, 2011b, xviii). The pillar of such development is the Internet and its constant expansion – nearly half of the world’s population (46.4%) in 2015 had Internet access, which represents the staggering growth of 832.5% since the beginning of the 21st century (IWS, 2016). The ways the Internet has been evolving and has been used over time has triggered lots of debates and is not in the focus of this presentation. However, since 2005, a new phrase Web 2.0 started representing particular forms of Correspondence: Internet development via an “architecture of participation” – a process in Miloš Ničić which the user simultaneously creates the content being used1; in other e-mail: words a system that “consumes and remixes data from multiple sources, [email protected] 1 For the downfalls of such a system see: Parikka, J. & Sampson, T. D. (2009). 37 Sitcon 2016 Doi: 10.15308/Sitcon-2016-37-42 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

including individual users, while providing their own wide phenomenon (Guttentag, 2015; Shelly & Fryden- data and services in a form that allows remixing by oth- berg, 2011). Various benefits and downsides of Airbnb ers” (O’Reilly, 2007, p. 17). platform have already been debated (Geron, 2013; Patel, The new chapter in the Internet development was 2015; Guttentag, 2015), and the impact of such a practice quickly symbolized in the word Sharing, a practice that on the destination itself remains to be fully investigated. soon became a constitutive activity of Web 2.0 (John, Nevertheless, as Yglesias (2012) suggests - “short term 2012). The term’s connotations fluctuated from nega- rentals should serve as a reminder that visitors aren’t best tive to positive and Sharing enriched the vocabulary of regarded as a resource to be milked by hotels” – brings the off-line environments with new meanings - “terms to our attention the impacts a booking system might im- such as ‘share your world’ or ‘share your life’ did not ap- pose on the destination and its traditional stakeholders pear before” (ibid, 178). The notion of Sharing quickly (namely accommodation providers).2 included numerous activities outside the data mixing Airbnb is popular among the tourists for many rea- frameworks among Internet users and found its most sons, but for the purpose of this paper one of the most tangible form in the sphere called Sharing economies. significant is the “homey” feeling preferred by certain Sharing economies symbolize new ways of socio- travellers (Guttentag, 2015). Renting out a residents’ economic networking – powered by the revolutionary living space via Airbnb is seen as an attempt to achieve breakthroughs in internet technology, Sharing economi- closer relationship with the destination itself. By logging es represent a point in which the internet networks do in privately owned space, space that would otherwise not connect only people with people, but people with be occupied by a resident of the receptive destination, physical objects. Sharing economies do not necessary by sharing communal spaces of the building with other include monetary exchange (ibid, 179), one might tra- residents, travelers try to reach intimate and direct rela- de in knowledge, skills, social reach and other resour- tionship with the destination and live authentic local ex- ces valuable in contemporary society (Gorenflo, 2010). periences. Liedtke’s (2011) findings suggest that having Regardless of the currency types, these networks can a direct contact with the locals is a factor as important certainly be seen as profitable environments (Gaskins, as a monetary aspect when choosing Sharing economy 2010). This phenomenon was subjected to wide and accommodation, while Stors & Kagermeier (2015) bring constructive analysis and criticism (Benkler, 2006; Tap- forward the authenticity and “perspective of the inhabit- scott and Williams, 2006; Hamari et al., 2015), but it is ants” as one of the key factors that shape travelers’ wish important to note that Sharing economies sprang out to engage in Sharing economy accommodation. during the Internet age (Belk, 2014), that they recon- We are of the opinion that the above mentioned mix ceptualize the classical understanding of property and of contemporary processes, including changes in tech- ownership (Botsman & Rogers, 2010) and include indi- nology, shifts in tourists’ priorities and wish for achiev- viduals renting out their underused assets, from personal ing higher level of “locality“ laid fertile ground for the di- belongings, to vehicles, vessels and real estate. Certain versification of tourist offer of the receptive destination, authors understand Sharing economies as transitional especially in the ways micro museums and Airbnb spaces stage towards post-capitalist environments in which con- collaborate and produce new narratives and experiences. sumer goods are becoming profit goods (Mason, 2015). Well suited illustration of successful Sharing economy is Results Airbnb, a web page that enables travelers to rent logging from “ordinary people”, owners and inhabitants of the The significance of micro-museums for various as- logging that is being rented. Initially envisioned as sub- pects of the tourism destination has been widely dis- stitute for traditional forms of accommodation, Airbnb cussed; most important findings originate from museum today offers various forms of places to stay, including management and destination management disciplines. tree houses, discarded airplanes, lighthouses, even whole Having in mind that this paper takes into introspection islands (Garun, 2013; Poggio, 2015). Airbnb started op- house museums, spaces that narrate about the past by erating in 2009 and since then has booked millions of employing artifacts and processes in connection to the room nights for 60+ million users in 2 million listings residents of the named houses, we consider short re- over 57000 locations worldwide (Smith, 2016). The ways marks about the house museums necessary. of subletting privately owned accommodation has been known for quite some time now, most famous cases are 2 In that way, one should understand various activities that local in connection to the “Grand Tour” (Black, 1985) in the communities undertake in order to tackle problems caused by th sharing economy platforms. Most notable is the case of Berlin’s 18 century, but it is Web 2.0 and new networking tech- City Senate efforts to normalize the disrupted housing market by nologies that transformed such a practice into a world- banning short-term rentals such as Airbnb (Oltermann, 2016). 38 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

The advantages of house museums are mainly iden- By outlining several important notes on the house tified in their particular ability to facilitate more direct museums and cases of stay-over museums, we intended contact between visitors and the historical narrative to set the path towards the analysis of the model that by intertwining personal memory and collective re- brings Airbnb accommodations and museum spaces in membrance. Although house museums carry the aura close cooperation. This model combines the abovemen- of “true reality“, as someone had actually lived in that tioned forms of traditional house museums and the idea house (Risnicoff de Gorgas, 2011), these spaces are nev- of museum spaces as suitable logging arrangements by er outside the scope of authenticity analysis. No matter setting a particular kind of synergy – short term rental how directly objects, persons or images from the past apartments furnished as a museum. These are the spac- are being displayed and narrated about in house muse- es where no famous individual from the past lived nor ums, they are always subjected to the representations, something significant from the past happened. Quite the and as such are inherently indirect and intermediary. opposite - they are everyday spaces arranged in such a Past does not occur only in time, it happens in space manner as to evoke certain memory, but only by em- too, suggests Schloegel (2009) while adding that the his- ploying constructed and not-inherent elements of the tory of houses is sometimes more important than the named spaces. lives of their inhabitants. Historic houses are not sourc- Yugodom is a short term Airbnb rental apartment ing their attractiveness only by exhibiting artifacts that set in the historic part of Belgrade, in the neighborhood belonged to the object, but by creating the ideas about named Dorćol. What sets Yugodom apart and makes it the people that lived there and occurrences that took interesting for both academic and tourism introspection place within its spaces (Pinna, 2001). Noteworthy is the is interior design, focused entirely on the aesthetics of concept of metaphorical spirit of the place, put forward the Socialist Federative Republic of Yugoslavia. While by Van Mensch (2011) in which a tripartite model con- explaining what Yugodom represents, Mario Milaković, sisting of physical properties, function and significance, the founder and curator, underlines: and context is considered basic for understanding the “Yugodom is a collection of furniture, decorations, perception of the property that visitors experience while souvenirs and similar items from the period of the Yu- in situ and as amalgam of the perceived authenticity of goslav mid-century moderna, situated in a flat of a 1960s the historic house. Out of these three, physicality con- military-constructed building in Dorćol area of Belgrade. nects us to the very house. “This physicality is the result The furniture is authentic and from the era, made in the of two processes: the dynamics between the house and Socialist Federal Republic of Yugoslavia. The building is its inhabitants in the pre-acquisition phase of its exist- authentic, the flat is authentic. Yugodom is also authen- ence, and the results of post-acquisition interpretations” tic, but it is an original creation, not a replica or imita- (ibid, 13). Echoing the mentioned notes, we would like tion of some old ex-YU flat; it is rather a flat/museum/art to emphasize that by employing the historic narrative, exhibition/design collection that is strongly influenced house museums do not offer only introspections into by the selected aspects of SFRY aesthetics, art, design and the lives of selected individuals from the past, but merge history” (Rahatlokum, 2015). micro and macro stories about wider social relations – Yugodom is branded as a living museum, advertised political, cultural, economic and other spheres of life of as such and received as one by both guests and domestic the destination (Pavoni, W.D.). and worldwide media4. Moreover, Mario underlines that Further step in understanding complex connections he does not feel as a hotelier or an art curator – “I com- between museums, its visitors and tourism destination is bined the museum with the rental-apartment, I actually the possibility of staying-over in the very museum prem- invented for myself a new category. Unlike conventional ises. Featured by many of the world’s most significant museums, the guests can touch everything; sleep in the museums (London’s Natural History Museum, British beds, experience the world as it was, not just behind glass 3 Museum etc.) stay-over practice is tailored for both cases. What you will experience and feel here will defi- children and adult visitors. This form of amalgamative nitely be stronger than distant exhibition”. (Vrana, 2015). experiences in which museums act as accommodation Taking into account the descriptions of Yugodom providers will be of importance for the particular type and the abovementioned theoretical notes on the de- of house museums presented herein. velopments of the Internet and networking technologies, sharing economy, micro museums and museums 3 The offer in the British Museum is particularly informative and is available on their webpage: http://www.timeout.com/ 4 Full press clippings on Yugodom are available at www.face- london/events/museum-sleepovers. book.com/yugodom. 39 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

as stay-over spaces, we would like to point out to several In other words, Airbnb house museums are proper particularities of Airbnb house museums. reflections of postmodern practices of border-blurring, where logging is combined with museum experiences Discussion and is merely constructed environment that has nothing in common with the historical facts related to the space it occupies. In that sense, these areas could be un- This apartment for short stay could be considered as derstood in Baudrillards’s ideas of simulation (1994), in a stay-over museum with a particular role in maintain- which the presentation is based on something that ac- ing and presenting aesthetical heritage of the previous tually never existed. In the case of Yugodom, the apart- epoch. Well received as museum space, Yugodom per- ment it occupies is not the representation of any actual forms within Belgrade’s tourism destination by articu- apartment from the ex-Yugoslav era, but it is rather an lating a historical narrative, predominantly by exhibit- aesthetical pastiche that produces a historical narrative. ing art and design collections from the time of socialist Airbnb house museums lack some of the charac- modernism. The apartment itself is not an authentic teristics that define the traditional house museums, apartment from the 1960s, it is rather an apartment characteristics that are in the core of management and that has been furnished with authentic pieces of furni- consumption of such spaces. Contrary to the above- ture from the era in which the space has been codified mentioned specificities, Airbnb museums do not take and with artifacts that carry „Made in Yugoslavia“ label. into consideration the pre-acquisition phase; the whole MacCannell (1973) suggests that tourists in pursuit for layer that constitutes the pre- musealization experience spaces and experiences of high authenticity are mainly is absent. There is no where from the Schloegel’s maxim prepared and informed in advance about the places they we mentioned, no physical characteristics that predes- visit. Bearing this in mind, the issue of contested au- tine the house for certain historical narrative. Bearing thenticity within Yugodom is of no concern, as visitors this in mind, one can rightfully raise a question as to are well informed about all aspects of the space and it is whether Airbnb house museums offer limited experi- up to them to decide if they shall spend their nights in a ences to their peers or whether the social framework museum or an apartment or an art gallery or something within which they operate makes necessary corrections else. Yugodom is not open for museum-like visits, it is a and supplements. space that is available only after accommodation book- Inspired by Van Mensch’s (2011) comparison of ing has been confirmed – a practice that is much more house museums to Foucauldian Heterotopias, we agree hotel-like than museum-like. By maintaining such busi- that a house museum “is not the house where something ness practice, that is – by not performing in the way tra- has happened, or where somebody has lived. It is the ditional museums do (sell entrance tickets, make guided house that is interpreted and accordingly presented as tours etc.), Yugodom maintains the necessary level of the representation of the house where something has spatial ambiguity needed for the guests to decide wheth- happened, or where somebody has lived” (ibid: 14). In er they are accepting the museum narrative or merely the case of Airbnb museums that we tried to explain sleep in a well-designed rental apartment. here, we think it would be correct to assume that those Airbnb house museums are entirely constructed in are the houses where nothing has happened and nobody the present and carry no connections to any intrinsic has lived. Those are the houses that are constructed, links to the past they narrate about. They are construct- made available and consumed as one that is interpreted ed as profit-based rental apartments with museum char- and accordingly presented as the representation of the acter being subordinated to the initial idea – successful house where something has happened, or where some- tourism accommodation. Airbnb house museums are body has lived. seen as museum spaces and as such, they convey certain historical narratives, narratives based on the contempo- Conclusion rary constructions. They rely heavily on the contemporary internet usage, particularities of Web 2.0, economy Numerous international guests of this particular of sharing and they make profit not by selling entrance Airbnb house museum appreciate Mario’s efforts and tickets and souvenirs, but by charging the accommo- enjoy his ideas in both aesthetical and hotelier terms. dation rates. In terms of the ownership structure, they These form the basis of Yugodom’s success epitomized are mainly privately-owned and managed and have no in high-mark reviews and comments and in media’s at- institutional affiliations with larger museum systems. tention, mainly in the area of tourism, design and archi- 40 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS tecture. In that sense, we expect certain rise in the num- IWS, (2016) Internet usage statistics - World Internet Us- ber of Airbnb house museums and similar spaces that ers and 2015 Population Stats. Retrieved: September combine heterogeneous frameworks in multilayered ac- 10, 2016, from http://www.internetworldstats.com/ stats.htm. commodation units and we encourage further introspections in such phenomena, mainly in the directions that James, P., & Szeman, I. (2010). Globalization and Culture – Volume 3: Global-Local Consumption. London: Sage have not been covered herein – empirical research on Publications. the demand side, ideological and business backgrounds John, N. A. (2012). Sharing and Web 2.0: The emergence and other socio-cultural sides of these specific house of a keyword. New media & society, 15(2), 167-182. museums and their impact on their respective tourism doi:10.1177/1461444812450684 destinations. Liedtke, A. K. (2011). One couch at a time – Analysing the travel behaviour and target group of couch surfers. References Stralsund (unpublished Bachelor thesis). MacCannell, D. (1973). Staged authenticity: Arrangements Baudrillard, J. (1994). Simulacra and simulation. Michi- of social space in tourist settings. American journal gan: University of Michigan press. of Sociology, 73(3), 589-603. Belk, R. (2014). You are what you can access: Sharing Mason, P. (2015). The end of capitalism has begun. Re- and collaborative consumption online. 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42 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Key issues on Tourism Destination Competitiveness

The role of user-generated content in increasing tourism destination competitiveness

Sonja Oklobdžija Abstract: Tourist experience is the most important tourism product. However, the quality of experience is a relatively neglected topic in tourism-related literature. Better understanding of the quality of experience that tourists had during Business School of Applied Studies, their visit can provide information needed to further develop the destination Blace, Serbia and enhance its competitiveness by adjusting its services to tourists’ needs. In addition, high quality of experience triggers the human need of sharing that experience. People have always shared their positive experience with their friends and peers, and with recent development of information technologies, sharing experience implies sharing it online as well. The aim of this paper is to show the importance of offering tourists high quality experience in order to share their opinions and recommendations online, making them available for other tourists, which will consequently enhance tourism destination competitiveness. In order to reach the conclusion, the paper will show the results of the research on the degree that Serbian tourists rely on user-generated content when choosing a destination and making additional travel choices. The data collected were analysed using the statistical analysis software SPSS, version 23.

Keywords: quality of experience, online reviews, travel-related content, social media.

Introduction

Tourism is a service industry, that is, an industry where no tangible goods are produced, but only services are provided to its consumers. In fact, the most important tourism product is the tourist experience. It dis- plays all the characteristics of services - it is intangible, inseparable from production, and it lacks heterogeneity and ownership (Williams and Sou- tar, 2009). The beneficial experience the visitors gain during their trip is an integral component of the tourism product (Pernecky and Jamal, 2010). The importance of service quality has been well documented in the tourism-related literature. However, the importance of the quality of experience has been relatively neglected, probably due to the fact that the quality of experience is subjective and, therefore, hard to measure. The quality of experience can be defined as “the subjective personal reactions and feelings felt by consumers when consuming or using a service” (Chen and Chen, 2010, p. 29). Better understanding of the quality of experience that tourists Correspondence: had during their visit can provide information needed to further develop Sonja Oklobdžija the destination and enhance its competitiveness by adjusting its services to e-mail: tourists’ needs. In addition, high quality of experience triggers the human [email protected] need of sharing that experience. People have always shared their positive 43 Sitcon 2016 Doi: 10.15308/Sitcon-2016-43-48 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

experience with their friends and peers, and with the re- sential part of travel-related information search (Leung cent development of information technologies, sharing et al., 2013). What makes people share their opinion experience implies sharing it online as well. Therefore, about their trip is either a very high or very low quality shared experiences are more public than ever and have of experience. Online travel community is considered the ability of reaching almost every person in the world. a source of credible information for potential tourists As the number of tourists worldwide is rising, so are since it provides valuable criticism and recommenda- their expectations and needs for more detailed infor- tions (Chung and Buhalis, 2008). Therefore, tourism mation. As a result, new and better ways of informing organizations and companies should ensure that the ex- potential tourists about the various options available to periences they offer are as real, compelling and memo- them have become more important than ever. The ap- rable as possible, in order to engage each customer in an propriate marketing strategy has always been the basis inherently personal way (Pine and Gilmore, 1998) and of achieving and maintaining tourism destination com- incite them to share their quality of experience online. petitiveness by offering potential tourists the opportunity to find the exact information they are looking for. Research Methodology However, the internet has completely changed the way travel- related information is distributed, as well as the The aim of this paper is to show the importance of way tourists access information, plan and book their offering tourists high quality experience in order for trips and share travel experiences (Buhalis and Law, them to share their opinions and recommendations on- 2008). Nowadays, modern tourists do not rely solely on line, which will consequently enhance tourism destina- the information sent directly by the travel organizations tion competitiveness. In order to reach the conclusion, or companies, but they also rely on online reviews and the paper will show the results of the research on the recommendations posted by other tourists who shared degree that Serbian tourists rely on user-generated con- their quality of experience. Social media websites, repre- tent while choosing a destination and making additional senting various forms of user-generated content (UGC) travel choices. For that purpose, a questionnaire was such as blogs, virtual communities, social networks, re- used for data collection. All the questions were multiple- views and media files shared on various internet sites choice questions. The survey was conducted online on a have gained substantial popularity in online travelers’ random sample of the population of the Republic of Ser- use of the Internet (Xiang and Gretzel, 2010). Many so- bia for the period from March 30, 2016 until April 15, cial media websites help users with posting and sharing 2016. The data collected were analysed using the statisti- comments, opinions and experiences related to travel, cal analysis software SPSS, version 23. The questionnaire which then serve as information to other users. With was answered by a total of 444 respondents. However, the growing popularity of user-generated content, con- only those respondents who claimed to regularly use sumers are gaining significantly more power in product digital media as a source of information while choos- development and distribution of information on the ing a tourism destination were taken into account, thus internet, while the authority of marketers and tourism including a total of 296 valid respondents. The research organizations and companies is declining (Thevenot, was based on the following hypotheses: 2007). Therefore, travel organizations and companies General hypothesis: no longer have ultimate control over the image of their destination or product (Hays et al., 2013). Since tour- H0 – Tourists rely on online reviews and recom- ism is “information-rich” industry (Gretzel et al., 2000, mendations to a great extent while choosing p. 147), user-generated content is extremely important a tourism destination and making additional for the tourism sector. There have always been tourists travel choices. who turned to recommendations of others in pursuit Specific hypotheses: of information about their future trips, and nowadays, H1 – Younger tourist are more prone to relying on online reviews and recommendations have become an online reviews and recommendations than inexhaustible source of referrals. Tourism products and the older ones. services are intangible. Therefore, other people’s recom- H2 – Tourists rarely write reviews. mendations can significantly influence one’s willingness to purchase them (Litvin et al., 2008). User-generated H3 – Tourist are prone to sharing travel-related content has become an additional source of information content on social media. that tourists consider part of their information seeking H4 – Facebook is social media website that most process, and social media websites have become an es- tourists use for sharing travel-related content 44 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Results Discussion

First of all, the respondents had to choose the digi- Numerous conclusions can be drawn based on the tal media they mostly rely on while choosing a tour- data collected and presented herein. First of all, the data ism destination. The data collected shows that 33.5% showed that a third of the respondents rely on online of the respondents rely on the recommendations of reviews and recommendations while choosing a tou- other tourists. In addition, 75.7% of the respondents rism destination, which is not an insignificant percen- rely on the results of their own internet search, 51.6% tage. However, the great majority of the respondents, of them use official web pages of tourism destinations, that is, a staggering 90.5% of them answered that they and 17.9% find the information needed on social merely on online reviews and recommendations while ma- dia, while 8.1% of the respondents rely on promotional king additional travel choices. In addition, in order to material received via email. The following step was to make an assumption on the basis of the sample about establish whether the respondents rely on reviews while the percentage of tourists in general population that rely making additional travel choices. The overall results on online reviews and recommendations while making show that only 9.5% of the respondents do not rely on additional travel choices, a new variable was created in reviews, while 90.5% of them do. Those who do rely on SPSS called “Reviews”. The variable contains two valu- reviews declared that they do it for the following rea- es – “I rely on reviews” and “I don’t rely on reviews”. sons: 64.9% of the them use reviews to help them with Therefore, the specific choice of reviews that the respon- choosing accommodation, 37.8% for choosing the best dents rely on is disregarded; the only important infor- attraction to visit in a destination, 32.1% for choosing mation is that they rely on them. After performing the local restaurants, 31.4% for informing about entertainment choices, 27% for choosing optional excursions and one-sample binomial test and testing different propor- 21.3% for choosing means of transportation. However, tions, we can draw a conclusion that the percentage of when asked whether they write reviews and recommen- tourists that relies on online reviews and recommenda- dations, as much as 73.6% of the respondents declared tions in general population is between 88% and 93%. that they do not write them, 17.6% of the respondents Fig. 1 shows the results of the one-sample binomial test. said that they write reviews about the accommodation, Therefore, the general hypothesis H0 claiming that tou- 11.5% of them write reviews about the tourism desti- rists rely on online reviews and recommendations to a nation itself, 7.8% write reviews about the local restau- great extent while choosing a tourism destination and rants, 5.7% about entertainment choices in the desti- making additional travel choices is accepted. nation, and 5.7% about the attractions in a destination. In order to establish whether there is a difference in On the other hand, when asked whether they share tra- the degree of relying on online reviews and recommen- vel-related content on social media, only 27.7% of the dations between younger and older respondents, the res- respondents declared that they never do. The rest of the pondents were divided into two groups – younger than respondents answered in the following way: 60.5% share 40 and older than 40, since 40 years old was the mean va- their travel photographs, 23.6% check-in on Facebook lue of the age groups offered in the questionnaire. Table while travelling, 17.2% share travel-related statuses on 1 shows that a significantly larger percentage of younger Facebook, 12.5% share travel videos, 5.7% write in fo- respondents relies on online reviews and recommendati- rums about their experience, 4.05% tweet about their ons compared to the older ones. Therefore, the hypothe- trip and 2.4% write a travel-related blog. Only the res- sis H1 claiming that younger tourists are more prone to pondents who share travel-related photographs or vi- relying on online reviews and recommendations than the deos were asked to determine the social media website older ones is accepted. they are most likely to share them on, i.e., 177 respondents answered the question about sharing travel-re- Another important conclusion that can be drawn lated photographs, and 37 of them responded about from the data presented in the paper is that even tho- sharing travel-related videos. The majority of the res- ugh the majority of the respondents are influenced by pondents chose Facebook – 92.1% of them share pho- reviews and recommendations of other tourists, they tographs and 81.1% share videos on this social network. themselves are very reluctant to write them. The data Facebook is followed by Instagram where 52.5% of the collected showed that as much as 73.6% of the repond- respondents share their travel-related photographs, and ents never write online reviews and recommendations, 70.3% of them share videos. The rest of the social media which leads to the acceptance of the hypothesis H2. were selected by significantly fewer respondents and can However, they are not reluctant to share different types therefore be disregarded in this paper. of travel-related content. All the respondents that share 45 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Figure 1. One-Sample Binominal Test – accepting general hypothesis (Source: Author)

Table 1. Cross tabulation showing the percentage of younger and older respondents relying on online reviews and recommendations

Source: Author

some type of travel-related content on social media they were visiting as well. In conclusion, the hypothesis were grouped regardless of their choice of reviews they H3 claiming that tourists are prone to sharing travel- rely on. Figure 2 shows the perecntage of respondents related content on social media is accepted. sharing travel-related content as opposed to those who Lastly, the data collected showed that Facebook is the do not. As can be noted, the majority of respondents most popular choice for sharing travel-related content. gladly share the details about their trip, thus creating The majority of respondents share their travel-related user-generated content about the tourism destination videos and photographs on this social network. In addi-

Figure 2. Percentage of respondents sharing travel-related content on social media (Source: Author)

Table 2. Sharing travel-related content on Facebook

Source: Author 46 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS tion, many respondents answered that they check-in on which consequently increases tourism destination com- Facebook while travelling or post travel-related statuses. petitiveness. Further research is needed in order to de- In order to prove that tourists mostly use Facebook for termine the degree of correlation between the quality sharing travel-related content, the respondents were di- of experience and willingness to share that experience vided into two groups, those who selected Facebook for online with other tourists. sharing at least one type of travel-related content, and those who did not select Facebook at all. Table II shows References that 61.8% of the respondents use Facebook for sharing their travel-related content, while 38.2% of them do not. Brown, B., & Chalmers, M. (2003). Tourism and mobile Therefore, the hypothesis H4 claiming that Facebook is technology. In ECSCW 2003 (pp. 335-354). Neth- erlands: Springer. doi: 10.1007/978-94-010-0068- a social media website that most of the tourists use for 0_18 sharing travel-related content is accepted. Buhalis, D., & Law, R. (2008). Progress in information Conclusion technology and tourism management: 20 years on and 10 years after the Internet: The state of eTour- ism research. Tourism management, 29(4), 609-623. The Internet has become an indispensable part of doi:10.1016/j.tourman.2008.01.005 modern life. It is not just a one-way source of informa- Chen, C. F., & Chen, F. S. (2010). Experience quality, per- tion such as traditional media, but a system based on ceived value, satisfaction and behavioral intentions the exchange of information, and therefore a very im- for heritage tourists. Tourism management, 31(1), portant instrument used in tourism. Internet connects 29-35. doi:10.1016/j.tourman.2009.02.008 companies with companies, companies with tourists, Chung, J. Y., & Buhalis, D. (2008). Information needs in onli- and tourists among themselves, which significantly en- ne social networks. Information Technology & Touri- hances modern tourists’ options for information search. sm, 10(4), 267-281. doi:10.3727/109830508788403123 Over the last few years, a number of online tools have Doolin, B., Burgess, L., & Cooper, J. (2002). Evaluating the emerged helping users to create and share their own use of the Web for tourism marketing: a case study content. Nowadays, different types of internet websi- from New Zealand. Tourism management, 23(5), tes are available for modern tourists enabling them to 557-561. doi:10.1016/S0261-5177(02)00014-6 publicly express their opinions and feelings at every Gretzel, U., & Yoo, K. H. (2008). Use and impact of online moment of their trip and share that information with travel reviews. Information and communication tech- other tourists (Munoz-Leiva et al., 2012). Thanks to the nologies in tourism 2008 (pp. 35-46). doi:10.1007/978- new applications and internet websites available, touri- 3-211-77280-5_4 sts are able to find more useful and personalized infor- Gretzel, U., Yuan, Y., & Fesenmaier, D. (2000). Pre- mation tailored to their tastes and preferences (Doolin paring for the new economadvertising strategies et al., 2002), enabling them to quickly and easily find and change in destination marketing organizati- the desired destination or accommodation (Brown and ons. Journal of Travel Research, 39(2), 149-156. Chalmers, 2003). User-generated content available on doi:10.1177/004728750003900204 the internet is playing an increasingly important role Hays, S., Page, S. J., & Buhalis, D. (2013). Social media in informing modern tourists (Gretzel and Yoo, 2008). as a destination marketing tool: its use by national This paper presented the results of the research on tourism organisations. Current issues in Tourism, the degree that Serbian tourists rely on user-generated 16(3), 211-239. doi:10.1080/13683500.2012.662215 content while choosing a destination and making ad- Leung, D., Law, R., van Hoof, H., & Buhalis, D. (2013). ditional travel choices. The data collected showed that Social Media in Tourism and Hospitality: A Litera- online reviews and recommendations play a very im- ture Review. Journal of Travel & Tourism Marketing, 30(1-2), 3-22. doi:10.1080/10548408.2013.750919 portant role in modern tourists’ information –seeking process. In addition, tourists who are not prone to writ- Litvin, S. W., Goldsmith, R. E., & Pan, B. (2008). Elec- tronic word-of-mouth in hospitality and tourism ing online reviews and recommendations gladly share management. Tourism management, 29(3), 458- their travel-related content on social media, mostly on 468. doi:10.1016/j.tourman.2007.05.011 Facebook, which increases the amount of user-gener- Munoz-Leiva, F., Hernández-Méndez, J., & Sánchez- ated content available for other tourists. The research Fernández, J. (2012). Generalising user behaviour is based on the assumption that high quality of experi- in online travel sites through the Travel 2.0 web- ence leads to tourists sharing their travel-related content site acceptance model. Online Information Review, on social media or writing an online recommendation, 36(6), 879-902. doi:10.1108/14684521211287945 47 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Pernecky, T., & Jamal, T. (2010). (Hermeneutic) Phe- Williams, P., & Soutar, G. N. (2009). Value, satisfaction nomenology in tourism studies. Annals of Tour- and behavioral intentions in an adventure tourism ism Research, 37(4), 1055-1075. doi:10.1016/j.an- context. Annals of Tourism Research,36(3), 413-438. nals.2010.04.002 Xiang, Z., & Gretzel, U. (2010). Role of social media in Pine, B. J., & Gilmore, J. H. (1998). Welcome to the ex- online travel information search. Tourism manage- perience economy. Harvard Business Review, 76, ment, 31(2), 179-188. 97-105. Thevenot, G. (2007). Blogging as a social media. Tourism and Hospitality Research, 7(3/4), 282-289.

48 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Key issues on Tourism Destination Competitiveness

Competitiveness of Vojvodina as a tourism destination: the analysis of selected Travel & Tourism Competitiveness Index indicators

Živana Krejić1, Abstract: 2 In 2015 and 2016, research was done on the territory of Vojvodina on the at- Katarina Plečić titudes of professionals employed in the tourism industry of Vojvodina, for the purpose of preparing a doctoral dissertation in order to show whether and to what extent Vojvodina represents a competitive tourism destination. 1 Singidunum University, PhD candidate, The aim of this paper is to present the results of the research on the evaluation of Belgrade, Serbia individual indicators of competitiveness index: in the field of regulatory frame- 2Singidunum University, work, business environment, infrastructure, and natural and cultural resources Faculty of Health, Law and Business of Vojvodina, with the aim to emphasize the strengths and weaknesses of the Studies destination and find optimal solutions for future tourism development of this Valjevo, Serbia area. The main hypothesis proposed in the study estimates that the amount of certain segments of the competitiveness index varies depending on the sector to which an employee belongs, and is not related to demographic variables such as gender, education, work experience and age of the respondents. The research results obtained by comparing two groups of independent samples on the basis of Mann-Whitney and Kruskal-Wallistest, within the public and the private sector in the tourism industry of Vojvodina, have shown that there is a statistically significant difference in the average assessment of the competitiveness index of Vojvodina as a tourism destination in relation to the sector to which the employed experts belong, but not in relation to the examined demographic variables. Research has shown that Vojvodina’s average rating as a tourism destination is 4.11. The average rating of the state sector is 4.24 and 3.98 of the private sector, as two sectors with the lowest grade estimate tourism infrastructure. This leads to one of the main conclusions that it is quite hard to reach destination competitiveness without infrastructure. Keywords: competitiveness index, Vojvodina, tourism, tourism industry, employees, socio-demographic characteristics.

Introduction

Competitiveness has become the central preoccupation of both developed and developing countries in an increasingly open and integrated world economy (Porter, 2004). There is hardly any tourism destination in the world whose attractiveness does not appeal to tourists and directs the demand for travel, at Correspondence: local, regional, national and international level. This is one of the reasons Živana Krejić why the competition between them is all more explicit, with the aim to e-mail: create a competitive advantage by the quality offer compared to similar [email protected] destinations in the region. Tourism is frequently viewed as an important 49 Sitcon 2016 Doi: 10.15308/Sitcon-2016-49-58 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

engine of economic growth and development of coun- tal of the destination for future generation“(Ritchie & tries contributing to increasing the economic welfare of Crouch, 2003, p. 2). local populations (Webster & Ivanov, 2014). Tourism destinations are amalgams of tourism pro- The overall competitiveness of the tourism industry ducts, offering an integrated experience to consumers is vital for the survival and growth of the internation- (Buhalis, 2000). al market, in terms of the increase in leisure time and Long-term development of tourism at the destinati- funds (Echtner & Ritchie, 2003). on refers to the establishment of a continuous process Increasing the bulk of free time and funds have of measuring the destination competitiveness, based on brought about great changes that eventually affected the continuous monitoring of competitiveness indicators (Popesku & Pavlović, 2015). the formation of the tourism offer, distribution of tourist arrivals during the year, as well as the impact on the In the 2015 report, the experts from the World Eco- demand for better quality services. nomic Forum stated that the aim of the Competitiveness Index is to provide a comprehensive strategic tool for Today, every company is operating in a competitive measuring the set of factors and policies that enable the environment, both internally and externally. In such sustainable development of the travel & tourism sector, circumstances, tourism, as part of the tertiary sector, which in turn, contributes to the development and com- can have beneficial effects on the increase of GDP of the petitiveness of a country (Crotti & Misrahi, 2015). country, as well as positive effects on the social, cultural The competitiveness of the tourism sector includes and environmental level destination (Cirstea, 2014). numerous factors such as the natural environment (geo- The goal of every tourism destination is to create graphy, climate, landscape), living environment, fun and an attractive product and to meet the needs of tourists entertainment etc. (Navickas & Malakauskaite, 2009). at the destination, so that it could offer the value for Based on the Competitiveness Index World Eco- money. The tourist satisfaction is often considered the nomic Forum in Serbia, in the period from 2007 to the most important tool for increasing the competitiveness present, Serbia as a tourism destination was low rated, of tourism destinations in the period of globalization. not only compared to the leading tourism country, but Modern tourists are more experienced and demand- also in relation to the neighboring countries. ing, and the tourism market with its dynamics contrib- Serbia does not have a recognizable image as a tour- utes to interchangeability and reconciliation of the sup- ism destination, apart from Belgrade, Kopaonik and few ply and demand (Gračan & Lugarić, 2013). other destinations, since it offers internationally recog- Tourism destinations combine a set of products and nized product (Čerović et al., 2015, p. 7). services, offered individually or together at a particular Research on the assessment of the individual ele- location, and place this product for offer in the global ments of competitiveness of Vojvodina as a tourism marketplace (Bajs, 2015, p. 123). destination is conducted among employees in the tourism industry of Vojvodina. The concept of “tourism destination” is a complex one, all tourism destinations actually being amalgams of Despite different assessments of certain elements of products, services, and experiences, with many different competitiveness of Vojvodina as a tourism destination, respondents in both sectors assigned the lowest grade to stakeholders involved (Iunius et al., 2015). tourism infrastructure of Vojvodina and clearly pointed Achieving a competitive advantage is directly linked to the big problem of this destination. with the satisfied tourists, for whom a large number In 2015, based on the estimates of the World Eco- of existing and new destinations compete, in order to nomic Forum Competitiveness index for Serbia, it is dominate the tourism market (Pavlic et al., 2011). The concluded that the natural and cultural resources of the issue of tourism destination competitiveness is based on place, along with the infrastructure get the lowest mark. the experience of tourists at the destination, as an essen- The aim of this paper is to present the results of the tial tourism product (Popesku, 2011). research based on the survey data of employees in the Tourism destination competitiveness was defined in tourism industry of Vojvodina, to compare the assess- the tourism literature as “its ability to increase tourism ment of competitiveness of tourism destinations by both expenditure, to increasingly attract visitors while pro- sectors, and to highlight the advantages and disadvan- viding them with satisfying, memorable experiences, tages that are important for future development of tour- and in a profitable way, while enhancing the well-being ism in this area, achieving competitiveness of Vojvodina of destination residents and preserving the natural capi- in relation to the similar destinations in the region. 50 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

The assessment of competitiveness of certain parts males (51.5%) and 99 females (48.5%). In terms of edu- of Vojvodina as a destination can be a guideline for de- cation, the majority of respondents have a university development of future strategy on tourism development, gree, i.e., 92 of them (45.1%), 61 of them (29.9%) finished in terms of precisely defined type of tourism that can be higher school, while 40 of them (19.6%) have a secondary developed in the future. school degree. The smallest number of respondents has completed master’s studies, i.e., 11 of them (6.4%). The RESEARCH METHODOLOGY average work experience of respondents is 10.6 years. The research process was implemented in three pha- The research included two groups: employees in the ses: data collection, sorting, grouping of data and sta- private and public sectors of the tourism industry of Vo- tistical analysis using statistical software SPSS, version jvodina who participate in the promotion of Vojvodina 17.0.0. as a tourism destination at the micro and macro levels, The data were analyzed using the method of descrip- participate in writing the strategy for tourism develop- tive and then inferential statistics. ment, impact the quality of services at the destination, and tourist satisfaction. Descriptive methods were used to describe the surveyed population: distribution of frequency (nominal The main hypothesis of the study estimates that the and percentage), mean values, median, standard devia- amount of certain segments of the competitiveness index varies depending on the sector to which the employ- tion, rank, minimum and maximum values. ee belongs, and is not related to demographic variables Statistical techniques for comparison of two groups such as gender, education, work experience and age of of independent samples, i.e. non-parametric techniques: the respondents. Mann-Whitney U test and the Kruskal-Wallis test were The work consists of two parts. The first part deals used to compare the attitudes of professionals employed with the assessment of the competitiveness index of in the tourism companies of Vojvodina, whereas the Serbia as a tourism destination by the World Economic comparison of statistical data was done by the compa- Forum. The second part includes research on the assess- rative method. ment of certain parts of the index of competitiveness By applying the appropriate research methods (Man- of Vojvodina as a tourism destination, the comparison Whitney and test Kruskal-Wallis test), the variables in- of the amount of the assessment of competitiveness of cluded in the survey were related to: compare the atti- experts employed in two sectors and the influence of tudes of employees in the two sectors and the impact of demographic characteristics in the destination competi- demographic characteristics of the respondents (gender, tiveness assessment. education, work experience and age) on average grade The data in the paper were collected by direct re- index competitiveness of Vojvodina as a tourism des- search. tination. The questionnaire was sent to 250 addresses of tourism entities in Vojvodina. In the questionnaire, 204 re- INDEX OF COMPETITIVENESS spondents expressed their opinion on the given matter OF SERBIA AS A TOURISM DESTINATION in various forms: live, by phone or via email. Of the total respondents, 102 (50%) belong to the companies in the private sector and the same number of respondents Competitiveness model of the World Economic Fo- (102) goes to public sector enterprises. rum is the only model on the basis of which the index The research was carried out partially, during the pe- of competitiveness is calculated and comparison of co- riod from May 2015 to May 2016 and was conducted by untries performed in relation to the current situation interviewing employees in tourism companies of Vojvo- in tourism. On the basis of the national economy, The dina that belong to the public (employed in the tourism World Economic Forum (WEF) developed the competi- organizations, CEO’s, managers, clerks, managers of re- tiveness index of travel and tourism (TTCI-Travel and sorts, city governments-sector for tourism, tour guides Tourism Competitiveness Index), which is a continua- employed in some of the sectors) and the private sector tion of the monitoring of competitiveness. TTCI index (CEO’s, managers, clerks in hotels, motels, boarding measures the factors and policies that make the develop- houses, hostels, travel agencies and independent travel ment of tourism and travel sector attractive for different guides). countries (Zecevic, 2011). The average age of employed respondents was 39.8 Competitiveness Index was being developed dur- years. Out of the total number of respondents, 105 were ing the period of six years: 2007, 2008, 2009, 2011, 2013 51 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

and 2015. Starting from 2015 Index, methodology has tion of tourism products based on them (Damnjanović been changed in order to combine four sub-indices, in- et al., 2013). stead of three, which was the case in previous years. The Table 1 illustrates the key indicators in the tourism main structural changes were separation of “enabling of Serbia, the values that are the subject of the evalua- environment” from “T&T policy and enabling factors”, tion and the reasons why our country is positioned low isolation of Infrastructure subindex, elevation of the role in Europe and the world in terms of destination com- of natural and cultural resources and rationalization of petitiveness. selection of indicators. It is important to emphasize that this research was Table 1. Competitiveness of Serbia in relation to world done for the purpose of preparing doctoral dissertation and European destinations which was in the process before the new 2015 Competi- tive Index methodology. Year 2008. 2009. 2011. 2013. 2015. It used to consists of three sub-indices: sub-index of the regulatory framework of travel and tourism (el- Rank/World 78/130 88/133 82/139 89/140 94/140 ements related to politics) that is marked with RF in Rank/Europe 37/42 38/42 38/42 40/42 41/42 the tables, sub-index of the business environment and infrastructure (BEI) and sub-index of human, cultural TTCI index 3.76 3.71 3,85 3,78 3,9 and natural resources (HCN). It is a combination of data that are publicly available, and provided by the In- Source: www3.weforum.org/docs/WEF_TT_Competitiveness_ ternational Tourism Organization, the annual reports ReportWEF TCCI report 2008-2013 of the World Economic Forum and institutions from countries that are the subject of tourist visits. Each of the Based on the data in Table 1, it is concluded that the sub-indices contains certain pillars of competitiveness. assessment of the competitiveness of Serbia as a tour- It contained 14 pillars of competitiveness, namely: 1) ism destination is quite low compared to the attractive political rules and regulations 2) environmental sustain- global tourism destinations. ability 3) security 4) health and hygiene 5) prioritiza- If the competitiveness of Serbia is observed in com- tion of travel and tourism 6) air transport infrastructure parison to other European countries, it can be conclud- 7) land transport infrastructure, 8) tourism infrastructure 9) infrastructure of information and communica- ed that its place is at the bottom of the table. The fact tion technologies 10) price competitiveness 11) human that the ranking of Serbia as a tourism destination has capital 12) inclination to travel and tourism 13) natu- been dropping in the period from 2008 to the present ral resources 14) cultural resources.1 The index should is particularly worrying. During the period from 2008 be seen as a useful tool, which can point to important and 2011, only four countries were ranked lower than indicators of the comparison with competitive tourist Serbia: Ukraine, Armenia, Bosnia and Herzegovina and 2 destinations (Popesku & Pavlović, 2013). Moldova . However, in recent years, it has continued to decline according to the World Economic Forum. In Serbia has been ranked in the index since 2008, and 2013 and 2015, only two countries in Europe were lower thanks to these data, we can determine the advantages ranked than Serbia, namely Albania and Moldova. and disadvantages of Serbia as a tourism destination. The index provides a comparative analysis of the des- According to the data and estimates of the World tination (the lowest index score is 1 and the maximum Economic Forum for 2015, Serbia as a tourism destina- is 7), which is especially important in achieving and tion occupies the last place in Europe in the aspect of maintaining a competitive advantage in relation to the business investments with a score of 3.38. Health and neighboring countries. hygiene in our country are evaluated with the highest th As a relatively new tourism market, Serbia can take mark (6.04), which puts Serbia on the 38 place out of advantage of this opportunity by creation of the modern 141 countries in the world. Natural resources got almost tourism product in order to gain a competitive advantage the lowest mark in respect to all European countries on the modern tourism market. An important role in with the index of 1.90. Only Moldova has a lower grade achieving such objective may be developing sustainable for natural resources than Serbia. The conclusion is that and responsible tourism products, while reaching a dou- air transport infrastructure (2.13), as well as the basic ble benefit - preservation of natural resources and crea- transport infrastructure (2.95), and international openness (2.39) are very badly rated. A very low grade of 1.61 1 http://www3.weforum.org/docs/WEF_TT_Competitiveness_ Report_2013.pdf, page 17, date of accessing the site - July 2015. 2 http://reports.weforum.org/, date of accessing the site - July 2015. 52 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS was given to the cultural resources of Serbia. Although it Evaluate the following elements in the city munici- currently seems that the assessment of the tourist service pality you live in, with grades 1-7 (1-least represented, of 4.50 is good, compared to other European countries 7 - most represented) and the surroundings, we conclude that Serbia is among a) rules and regulations ______the last positioned countries in Europe3. b) environmental sustainability ______To that end, it is necessary to research which ele- c) safety and security ______ments are relevant for the assessment of competitiveness of Vojvodina as a tourism destination and whether d) health and hygiene ______the assessment level depends on the sector employees e) opportunities for the development belong to or demographic variables such as gender, edu- of air traffic ______cation, years of work, experience or age of respondent. f) the quality of transport infrastructure ______g) tourism infrastructure ______ASSESSMENT OF THE COMPETITIVENESS INDEX OF VOJVODINA AS A TOURISM DESTINATION IN THE h) the price and quality of service ______ASPECT OF THE EMPLOYEES OF TOURISM INDUSTRY i) human resources in the tourism and hospitality ______Based on the model of competitiveness of the World j) the quality of the accommodation offer ______Economic Forum, a question was set within a question- k) natural resources ______naire, on the basis of which the quality of services in the field of the regulatory framework, business environ- Employees in the private sector graded Vojvodina as ment and infrastructure, and cultural and natural re- a tourism destination with an overall score of 3.98, while sources (pillars of Competitiveness Index methodology the public sector services with an average score of 4.24. before 2015) was assessed. The objective of the analysis The results of the descriptive statistics about the index and evaluation of above mentioned fields was to get the evaluation of the tourism competitiveness of Vojvodina index value of the competitiveness of Vojvodina as a aregiven in Table 2. tourism destination in the aspect of employees in the Mann-Whitney test showed that p<0.05, which in- tourism industry of Vojvodina. dicates a statistically significant difference in the aver- In this regard, it is necessary to research which ele- age assessment of the competitiveness index, with re- ments affect the level of the assessment of competitive- spondents from the private sector assessing elements in ness of Vojvodina as a tourism destination and whether Vojvodina as a tourism destination with a lower grade, the level of assessment depends on the sector to which as opposed to the respondents belonging to the public employees belong or demographic variables such as gen- sector. The average score of the index of competitive- der, education, years of work experience or age of the ness of Vojvodina as a tourism destination based on the respondents. answers of all respondents was 4.11.

Table 2. Evaluation of the competitiveness index in the tourism of Vojvodina Marks All respondents Private sector (n=102) Public sector (n=102) Average value 4.11 3.98 4.24 Median 4.00 4 4.08 SD 0.58 0.47 0.65 Span 3.0-6.1 3.0-5.8 3-6.1 Scale 1-7 3.0-3.5 N (%) 19 ( 9.3) 10 (9.8) 9 (8.8) 3.5-4.0 N (%) 75 (36.8) 40 (39.2) 35 (34.5) 4.0-4.5 N (%) 64 (31.4) 41 (40.2) 23 (22.5) 4.5-5.0 N (%) 25 (12.3) 7 (6.9) 18 (17.6) 5.0-5.5 N (%) 16 ( 7.8) 3 (2.9) 13 (12.7) 5.5-6.1 N (%) 5 ( 2.4) 1 (1.0) 4 (3.9) Total N (%) 204 100 102 100 102 100 Source: Authors

3 http://reports.weforum.org/2015, site was visited in January 2016. 53 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

The assessment of the value of individual elements Employees in the private sector marked safety and within the index of competitiveness of Vojvodina as a security at the destination with the highest grade of 5.58, tourism destination by all respondents is shown in Table while they assessed the tourism infrastructure with the 3, based on which we note that the safety and security lowest average grade of 2.55 (Table 5) got the top mark 5.44, while the tourism infrastructure Based on the assessment of individual elements of is estimated with the lowest mark of 2.90. the competitiveness index of Vojvodina as a destina- The public sector assigned the lowest average mark tion, we conclude that there are differences in the level of 3.2 to tourist infrastructure and natural motives with of assessment of elements between the employees in the the highest score of 5.85. public and private sectors.

Тable 3. The highest and lowest rated components of the competitiveness index by all respondents

Opportu- The quality Human The quality Envonmen- nities for Tourism The price Rules and Safety and of transport resources of accom- Natural Cultural tal sustain- Health air traffic infrastruc- and quality regulations security infrastruc- in tourism modation resources resources ability develop- ture of service ture industry offer ment Valid 204 204 204 204 204 204 204 204 204 204 204 102204 N Missing 0 0 0 0 0 0 0 0 0 0 0 0 Mean 3,57 3,97 5,44 4,46 3,40 3,25 2,90 3,75 3,73 4,41 5,25 5,02 Median 3,50 4,00 5,00 5,00 2,00 3,00 3,00 4,00 4,00 4,00 5,00 5,00 Std. Deviation 1,170 1,091 1,056 1,440 2,516 1,100 1,138 1,109 1,142 1,630 1,472 1,402 Minimum 1 1 3 1 1 1 1 2 1 1 2 2 Maximum 7 7 7 7 7 7 6 7 7 7 7 7 Source: Authors

Тable 4.The highest and lowest rated components of the competitiveness index by the respondents employed in the public sector

Opportu- The quality Human The quality Envonmen- nities for Tourism The price Rules and Safety and of transport resources of accom- Natural Cultural tal sustain- Health air traffic infrastruc- and quality regulations security infrastruc- in tourism modation resources resources ability develop- ture of service ture industry offer ment Valid 102 102 102 102 102 102 102 102 102 102 102 102 N Missing 0 0 0 0 0 0 0 0 0 0 0 0 Mean 3,83 4,07 5,30 4,82 3,37 3,31 3,25 3,76 3,83 3,87 5,85 5,60 Median 4,00 4,00 5,00 5,00 2,00 3,00 3,00 4,00 4,00 4,00 6,00 6,00 Std. Deviation 1,235 1,046 ,973 1,129 2,571 1,258 1,214 1,187 1,072 1,474 1,230 1,188 Minimum 2 1 3 2 1 2 1 2 2 1 2 2 Maximum 7 7 7 7 7 7 6 7 6 7 7 7 Source: Authors

Table 5. The highest and lowest rated components of the competitiveness index by the surveyed employees of the private sector

Opportu- The quality Human The quality Envonmen- nities for Tourism The price Rules and Safety and of transport resources of accom- Natural Cultural tal sustain- Health air traffic infrastruc- and quality regulations security infrastruc- in tourism modation resources resources ability develop- ture of service ture industry offer ment Valid 102 102 102 102 102 102 102 102 102 102 102 102 N Missing 0 0 0 0 0 0 0 0 0 0 0 0 Mean 3,31 3,87 5,58 4,46 3,43 3,18 2,55 3,75 3,62 4,95 4,64 4,45 Median 3,00 4,00 6,00 5,00 2,00 3,00 2,00 4,00 4,00 5,00 4,00 4,00 Std. Deviation 1,043 1,132 1,121 1,681 2,472 ,916 ,940 1,031 1,203 1,607 1,447 1,369 Minimum 1 1 3 1 1 1 1 2 1 1 2 2 Maximum 6 7 7 7 7 5 6 7 7 7 7 7 Source: Authors 54 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

THE ANALYSIS OF THE COMPETITIVENESS that there is no statistically significant difference in INDEX OF VOJVODINA AS A TOURISM the average assessment of the competitiveness index DESTINATION RELATED TO DEMOGRAPHIC according to the education level of respondents. VARIABLES Table 7 provides the descriptive statistics of the assessed responses to the question as to whether the The survey of the descriptive statistics of the assessed level of the assessment of the value elements of Vo- responses to the question as to whether the level of the jvodina as a tourism destination is related to educa- assessment of the competitiveness index of Vojvodina tion. as a tourism destination is related to gender is given in b) Testing dependence on the assessment index of com- Table 6. petitiveness and years of work experience of the res- Mann-Whitney test showed that p<0.05, which in- pondents. dicates that there is no statistically significant difference Kruskal-Wallis test showed that p<0.05, indicating in the average assessment of the competitiveness index that there is no statistically significant difference in between men and women. the average assessment of the competitiveness index a) Testing the dependence on the assessment index of according to the years of work experience of the re- competitiveness and education of the respondents. spondents. Kruskal-Wallis test showed that p<0.05, indicating

Table 6. Rating Competitiveness Index of Vojvodina in relation to gender of the respondents Grades All respondents Men (n=105) Women (n=99) Average value 4.11 4.04 4.18 Median 4.00 3.92 4.08 SD 0.58 0.59 0.56 Span 3.0-6.1 3.0-6.1 3.1-5.7 Scale 1-7 3.0-3.5 N (%) 19 (9.3) 14 (13.3) 5 (5.0) 3.5-4.0 N (%) 75 (36.8) 40 (38.1) 35 (35.4) 4.0-4.5 N (%) 64 (31.4) 28 (26.7) 36 (36.4) 4.5-5.0 N (%) 25 (12.3) 18 (17.1) 7 (7.1) 5.0-5.5 N (%) 16 (7.8) 2 (1.9) 14 (14.1) 5.5-6.1 N (%) 5 (2.4) 3 (2.9) 2 (2.0) Total N (%) 204 100 105 100 99 100 Source: Authors

Table 7. Rating Competitiveness Index of Vojvodina in relation to education of the respondents Grades All respodents High school (n=40) College (n=61) University (n=92) Master (n=11) Average value 4.11 3.95 4.18 4.2 4.4 Median 4.00 3.92 4.08 4.1 4.2 SD 0.58 0.41 0.56 0.6 0.6 Span 3.0-6.1 3.0-4.8 3.1-5.7 3.1-5.8 3.6-5.6 Scale 1-7 3.0-3.5 N (%) 19 9.3 5 12.5 4 6.6 10 10.9 0 0.0 3.5-4.0 N (%) 75 36.8 16 40.0 26 42.6 31 33.7 2 18.2 4.0-4.5 N (%) 64 31.4 14 35.0 22 36.1 24 26.1 4 36.4 4.5-5.0 N (%) 25 12.3 5 12.5 5 8.2 13 14.1 2 18.2 5.0-5.5 N (%) 16 7.8 0 0.0 3 4.9 11 12.0 2 18.2 5.5-6.1 N (%) 5 2.4 0 0.0 1 1.6 3 3.3 1 9.1 Total N (%) 204 100 40 100 61 100 92 100 11 100 Source: Authors 55 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Table 8. Assessment of index of competitiveness and years of work experience of respondents From the age From the age Grades All respondents Up to the age of 5 of 6 to 10 of 11 to 15 Over the age of 15

Average value 4.11 4.14 4.20 4.1 3.9

Median 4.00 4.08 4.08 4.1 3.8

SD 0.58 0.65 0.61 0.5 0.4

Span 3.0-6.1 3.0-6.1 3.0-5.8 3.1-5.8 3.2-5.1

Total N (%) 204 100 66 32 62 30 44 22 32 16 Source: Authors

Table 9. Assessment of index of competitiveness of Vojvodina related to the age of respondents All Up to 33 From 34 to 39 From 40 to 45 Over 45 Grades respondents years of age years of age years of age years of age Average value 4.11 4.16 4.09 4.2 4.0

Median 4.00 4.08 4.00 4.1 3.9

SD 0.58 0.70 0.55 0.6 0.4

Span 3.0-6.1 3.0-6.1 3.1-5.2 3.2-5.8 3.6-5.6

Total N (%) 204 100 53 26 58 28 52 25 41 20 Source: Authors

Table 8 gives the descriptive statistics of responses to CONCLUSION the question as to whether the level of the assessment of the value elements of Vojvodina as a tourism des- The survey showed that the average score of the com- tination is related to years of work experience. petitiveness index of Vojvodina as a tourism destination c) Testing dependence on the assessment index of com- in the aspect of the surveyed employees in the tourism petitiveness and the age of the respondents. industry companies of Vojvodina is 4.11. Kruskal-Wallis test showed that p<0.05, indicating The private sector’s competitiveness index was rated that there is no statistically significant difference in 3.98. Tourism infrastructure was graded with the lowest the average assessment of the competitiveness index score of 2.55, and safety and security by the highest rate by age of the respondents. of 5.58. The public sector assessed the competitiveness of Vojvodina as a destination with 4.24; the lowest grade of Table 9 illustrates the descriptive statistics of re- 3.25 was given to tourist infrastructure and the highest sponses to the question as to whether the level of of 5.85 to natural resources. There are differences in the the assessment of the value elements of Vojvodina assessment of the elements of competitiveness of Vojvo- as a tourism destination is related to years of work dina as a destination exclusively in relation to the sector experience of the respondents. to which respondents belong and are not related to de- Based on these results, it can be concluded that the mographic variables (gender, education, years of work amount of the assessment of the value chain of Vojvo- experience in the tourism industry or the age of the re- dina as a tourism destination varies depending on the spondents). Based on the research results, the hypothesis sector to which tourism experts in Vojvodina belong. presented in the manuscript is accepted. The conclusion is also that the assessment level of Despite the increased value of the competitiveness the value chain is not related to any of the observed de- index of Serbia in 2015 of 3.9 (Table 1), Serbia as a tour- mographic variables. This is why we will test the second ism destination is on the unenviable 41st place out of a subsidiary hypothesis in the further research with aim to total of 42 European countries. Based on the evaluation highlight the strengths and weaknesses of Vojvodina as score of individual elements of competitiveness index a destination by comparing it with similar destinations of Vojvodina of 4.11, it can be concluded that the em- and measuring the attitudes of professionals who are in ployees in the tourism industry of Vojvodina have given direct contact with tourists at work. this region a significantly higher grade, thanks to higher 56 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS grades of employees in the public sector. When observ- survive the market competition. Future strategies for de- ing solely the estimates of the private sector (3.98), it is velopment of Vojvodina as a tourism destination should concluded that the approximate value assessment index be based on research and opinions of tourism experts, of competitiveness of Serbia as a destination is 3.9. with a view to profit and increase the quality of services Applying competitiveness index as an element for provided to tourists. Businesses in the tourism market determining the strategic development of tourism in of Vojvodina need to compete, and their effectiveness Vojvodina, the strengths and weaknesses of the destina- should be the main criterion of business success. tion are highlighted and the optimal solution for future development of tourism is proposed. REFERENCES During the research, we measured the attitudes of Andreson, T., & Getz, D. (2009). 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Tourism Management, 21(1), 97-116. can be a competitive and attractive tourism destination doi:10.1016/S0261-5177(99)00095-3 in specific segments of offer (Krejić et al., 2016, p. 612). Cirstea, S.D. (2014).Travel & Tourism Competitiveness: Given the fact that the private sector is financed from A Study of World’s Top Economic Competitive Co- its own revenues, attitudes of employees belonging to untries. Procedia Economics and Finance, 15, 1273- this sector should be pursued in the future develop- 1280. doi:10.1016/S2212-5671(14)00588-7 ment of tourism in Vojvodina. Tourism organizations Crotti, R., & Misrahi, T. (2015). The Travel & Touri- as the most widespread form of public enterprises in sm Competitiveness Report 2015: Growth through the tourism industry are financed by the state or local Shocks. World Economic Forum: Geneva, Switzer- government’s budgets and can be seen as an outdated land. form of business that employs political staff of the rul- Čerović, S., Barjaktarević, D., & Knežević, M. (2015). ing structures in Vojvodina. Podrška razvoju turizma kao factor konkuren- Although tourism represents a mixed industry tnosti Srbije kao turističke destinacije, SITCON, which includes the companies of the private and public 28.09.2015. (pp. 1-8). Belgrade: Singidunum Uni- sector, the attractiveness of observation, type of tour- versity. doi:10.15308/sitcon-2015, 9-17 ism and service quality differ depending on whether we Damnjanović, I., Plećić, K., & Marković, M. (2013). Kre- refer to profit or non-profit organizations (Anderson & iranje održive destinacije: Studija slučaja Valjevo, Getz, 2009). Srbija. 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Raising Com- the involvement in the events, promising so many pub- petitiveness for Tourist Destinations through In- lic benefits, and thus increasing the revenue. formation Technologies within the Newest Tour- However, for the long-term development of the des- ism Action Framework Proposed by the European tination and its survival, it is necessary to constantly im- Commission. Sustainability, 7(9), 12891-12909; prove the quality of services so that a destination could doi:10.3390/su70912891 57 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Krejić, Ž.,Čerović S., & Milićević S. (2016). Impact of Popesku, J., & Pavlović, D. (2015). Adapted integrate socio-demographic characteristics on travel expen- model of destination competitiveness, SITCON, ditures of Hungarian tourists in the village of Skore- 28.09.2015. (pp. 9-17). Belgrade: Singidunum Uni- novac. Economics of Agriculture, 2(2016), 601-615. versity. doi:10.15308/sitcon-2015-9-17 Navickas V., & Malakauskaite A. (2009). The Possibili- Porter, M.E (2004). Building the microeconomic foun- ties for the Identification and Evaluation of Tour- dations of prosperity: Findings from the business- ism Sector Competitiveness Factors. Engineering competitiveness index.The Global Competitiveness Economics, 61(1), 37-43. Report 2003-2004. New York: Oxford University Pavlic, I., Perucic, D., & Portolan, A. (2011). Tourists’ sat- Press: . isfaction as an important tool for increasing tour- Ritchie, J.R.B., & Crouch, G.I. (2003). The Competitive Des- ism destination competitivness in the globalization tination: A Sustainable Tourism Perspective. Cam- conditions: The case of Dubrovnik-Neretva County. bridge, UK: CABI Publication. International Journal of Management Cases 13(3), Zečević, B. (2011). Koncept konkurentnosti turističkih 591-599. destinacija: značaj i primenljivost na slučaju Srbije. Pallant, J. (2009). SPSS priručnik za spasavanje. Novi Sad: Beograd: Еkonomski fakultet. Mikro knjiga. Webster, C., Ivanov, S., & Illum, S. (2014). Transforming Popesku, J. (2011). Menadžment turističke destinacije. competitiveness into economic benefits: Does tour- Beograd: Univerzitet Singidunum. ism stimulate economic growth in more competi- Popesku, J., & Pavlović D. (2013), Competitiveness of tive destinations? Tourism Management, 40, 137- Serbia as a Tourist Destination-Analysis of Selected 140. doi:10.1016/j.tourman.2013.06.003 Key Indicators.Časopisza marketing, teoriju i praksu, 44(3), 199-211. doi:10.5937/markt1303199P

58 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Key issues on Tourism Destination Competitiveness

Tourist experience as the basis for destination competitiveness: A case study of Ohrid

Simonida Vilić Abstract: Since the habits and preferences of customers are constantly changing, the exist- Tatjana Dujaković ing and new tourism destinations are increasingly competing to find new ways to attract tourists and remain competitive in the market. Quality improvement has become an imperative in creating a strategy for achieving the destination University for Business Studies, competitiveness. This improvement is based on tourism experience acquired Banja Luka, Bosnia and Herzegovina during the visit and the first impression of the destination created in the minds of consumers. This paper aims to explore how tourism experience affects the awareness of consumers and their perception of destination competitiveness.

Keywords: tourism experiences, destination competitiveness, tourism satisfaction.

Introduction

At the global tourism market, tourism destination is a fascinating and intriguing concept. In tourism industry, competition among territorial areas is usually not centered on the single aspects of the tourism product (environmental resources, transportation, tourism services, hospitality etc.), but on the tourism destination as an integrated set of facilities for tourists (Buhalis & Foerste, 2015). Competitiveness is the ability to increase tourism expenditure, to attract a vast number of visitors while providing them with satisfying, memorable experiences and in a profitable way, while enhancing the wellbeing of destination residents and preserving the natural capital of the destination for future generations (Ritchie & Crouch, 2012). Due to the different nature of destinations or the purpose/types of tourism activities, it is difficult to measure, evaluate, and compare destinations, as in many cases they are unique in their features and cannot be considered identical (Prebensen et al., 2014). Therefore, if we analyze the competitiveness of tourism destinations, it is necessary to investigate the level of satisfaction of visitors and the quality of tourism experience as a paradigm of destination competitiveness development in the global tourism market. This concept is imperative because there is a strong link between satisfaction and repeat purchasing behavior, consumer loyalty, switching behavior, complaining behavior, word-of-mouth recommenda- Correspondence: Simonida Vilić tion, revenue and profits (Vasilevich & Czetyrbok, 2015). The experience is an inward state of an individual, triggered by phenomena a person en- e-mail: countered, endured and experienced (Cohen & Cohen, 2012). According [email protected] to Middleton and Clarke (2012), the overall tourism offer might be defined 59 Sitcon 2016 Doi: 10.15308/Sitcon-2016-59-63 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

in terms of five main components: destination attrac- tool to use testing methods. The selection of respondents tions, destination facilities and services, accessibility of was random, and the sample included 73 respondents the destination, images, brands and perceptions, price from Bosnia and Herzegovina during the period May - to the visitor. Thus, many destinations are trying to offer June 2016. The survey was conducted at the destination. an unforgettable experience to tourists with a service of superior quality whose synergies will provide the highest RESEARCH RESULTS AND DISCUSSION level of satisfaction and exceed the expectations of tourists. Baker and Crompton (2000) define satisfaction as The demographic data showed that out of 73 re- the tourist’s emotional state after experiencing the trip spondents who provided gender information, 50.7% while Oliver (2012) concluded that tourism satisfaction were male, while 49.3% were female. As for the age is based on the coincidence of the expectations tourists structure of the respondents, the two most dominant have before visiting the destination and the results of ex- groups were young adults (35.6%) or those middle-aged periences achieved at the destination i.e., a comparison (23.3%). Most of the respondents were married (47.9%). between the previous image the tourist had about the Data on the level of education of respondents indicate destination and the one based on what he/she sees, feels that 34.2% of the respondents had secondary education and remembers about the destination. and 17.8% of the respondents possess graduate and The goal of every tourism destination is to offer postgraduate education. unique, extraordinary and memorable tourism experi- As for the answer to the question concerning the ences to target tourists so as to maintain a sustainable frequency of visits to the city of Ohrid, we can see that competitive advantage. In order to meet the expecta- 64.4% of tourists visited the city of Ohrid 3-5 times. tions of tourists in the best possible way, it is necessary This data show that destination managers must work for a destination to constantly explore the attitudes and perceptions of tourists. The analysis of tourists’ at- towards promoting tourism in a way that will attract titudes, their behavior and emotional experience of a new visitors and encourage them to come back. The av- destination, as well as the assessment of the complete erage duration of stay of the largest number of tourists experience of tourists after visiting destinations are the (49.3%) in Ohrid included at least one week. basis for creating a branding strategy destination and With sources of information that encouraged the de- increasing its competitiveness. Creating a respectable cision about travel, the respondents were able to choose and modern destination brand, and tourist stamps, af- among various answers, of which most relevant are: firmation and evolution of its competitive identity and ◆◆ The recommendations of friends, colleagues external reputation, is a tool of strategic destination or relatives as very good promoters of tourism, management. since 38.9% of tourists listened to them while tak- The main objective of this study is to assess the first ing a decision. The results indicate the strength of impression that visitors have of the area and analyze the word-of-mouth communication. key attributes which should lead to improving the qual- ◆◆ Satisfaction during the previous visit to desti- ity of the overall tourist experience, and therefore tourist nation was crucial for the decision of 19.4% of satisfaction, the construction of a loyal relationship with tourists to revisit the city of Ohrid, which indi- tourists and increasing the destination competitiveness. cates that the tourists return to destinations that The paper analyzes the results of the conducted research manage to respond to their demands and expec- on the perception that tourists have of the city of Ohrid tations. as a tourism destination. The research led to clear in- ◆◆ It is indicative of the number of tourists who are dicators that also reflect the attitudes and preferences informed about the city of Ohrid via the Internet of tourists who visited the city of Ohrid, what makes it and 40.3% of them confirm that a good Internet unique and attractive for tourist trips, and which elements constitute its unique brand identity. presentation can attract potential tourists. As regards the period or season in which the re- RESEARCH METHODOLOGY spondents decided to travel to Ohrid, the highest percentage of respondents, namely 37.5%, visited Ohrid In the previous part of the paper, methods of de- during the summer. Similarly, 36.6% of respondents vis- scription and analysis were used, while the test method ited this city in spring. The data show that the main rea- was used for collecting primary data. A questionnaire son to visit Ohrid is of purely tourist nature (57.8%).The was used for the implementation of field research as a data show that most tourists come to visit certain desti- 60 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS nation because of some event organised there (60.6%). tourists, i.e., 97.2%, assigned highest rates to the natural This high percentage clearly shows how the city of Ohrid sights of Ohrid. The reason for this lies in the fact that is a very attractive destination, with well organized ac- Lake Ohrid is over three million years old and is a rather tivities, including cultural, sporting and entertainment fascinating destination, which supplies fresh and clean events that attract the attention of potential tourists. water that is healthy to drink, which is nowadays a real Tourist experience represents the basic mechanism rarity (Deliso, 2007). In the next part of the question- for successful management of destination competitive- naire, tourists had the task to assess the extent to which ness. Experience is gained during the stay of tourists and they agree with these views, on the 1-5 scale (from 1 = if positive, it may substantially determine the decision insufficient to 5 = excellent). In this way, guests are ap- to come back. By analyzing the reasons why tourists praised accommodation facilities, cultural and histori- would revisit Ohrid, it can be noticed that the two most cal attractions, compliance and quality of service prices, dominant responses are the quality of rest (43.1%) and the local culinary offer, hospitality and kindness of the natural beauty of the destination (30.6%). The answer to local people, the uniqueness of cultures and customs, this question is clear evidence that Ohrid gives a specific nightlife and entertainment, local infrastructure, avail- sense of peace and well-being, both spiritual and physi- ability of tourism information, landscapes / natural at- cal. The data in Figure 1 show that the largest percentage tractions and non-contamination of the environment. of tourists gave the highest evaluation of the tourist offer The answers to these questions are illustrated in Table 1. of Ohrid, which indicates that tourists recognized the Tourists strongly agree that the top four core values diversity and quality of the destination. of Ohrid as a destination are: landscapes / natural attrac- Ohrid has a very rich and diverse historical and cul- tions 95.8%, unpolluted life environment 89.7%, offer of tural heritage. Given the cultural and religious differ- cultural and historical attractions 88.9% and hospitality ences and changes, it is a miracle that so many historical and kindness of the local population 88.7%. It should be sites have been preserved up to the present. There are pointed out that none of the interviewed tourists rated over 50 thousand people of different religious affiliations negatively any of the key attributes. The data indicate and nationalities that live in peace and coexistence in that tourists recognized Ohrid as a destination with un- Ohrid (Balabanov, 2010). Tourists can feel this harmony polluted natural resources, diverse cultural and histori- and always come back to at least briefly stop time and cal heritage and hospitable population. enjoy the moment. Special interest of tourists is the way The final point of the research was to analyze the en- in which culture, tradition and history are linked. This tire emotional experience of tourists who visited Ohrid, is the reason why the highest percentage of respondents, where the largest percentage of tourists, i.e. 77.8% char- i.e., 87.5% of them assigned highest rates to cultural and acterized this destination as a wonderful experience historical attractions. Also, the highest percentage of filled with beautiful and positive emotions.

Figure 1. Assessment of the tourist offer in Ohrid 61 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Table 1. Key attributes of the city of Ohrid

Key attributes of the city of Ohrid No. Evaluation Excellent Very good Good Weak Insufficient

1 Quality of accommodation facilities 75% 22.2% 2.8% 0% 0%

2 Offer of cultural and historical attractions 88.9% 11.1% 0% 0% 0%

3 Compliance of quality services and prices 66.2% 25.4% 7% 1.4% 0%

4 Rating the local gastronomic offer 87.5% 6.9% 5.6% 0% 0%

5 Hospitality and kindness of the local population 88.7% 9.9% 1.4% 0% 0%

6 Uniqueness of cultures and customs 87.5% 9.7% 2.8% 0% 0%

7 Nightlife and entertainment 73.6% 18.1% 8.3% 0% 0%

8 Local infrastructure 67.2% 26.9% 4.5% 1.4% 0%

9 Availability of useful tourist information 72.2% 20.8% 5.6% 1.4% 0%

10 Landscapes / natural attractions 95.8% 2.8% 1.4% 0% 0%

11 Unpolluted life environment 89.7% 8.8% 1.5% 0% 0%

CONSLUSION tourists to be involved and learn about the local history, culture, authentic local food and cuisine, languages and In today’s highly competitive market, the destina- local lifestyles which may further add value to their ex- tion’s survival depends greatly on its ability to provide periences. Destination managers/marketers need to pay superior tourist experience, which generates tourist sat- special attention to the quality of on-site experience. isfaction. Every manager who wishes to gain advantage Also, managers / marketers need to focus on the active in terms of providing high-quality tourist experience promotion of the destination that will enable them to must recognize what tourists want and correctly assess create a positive image of the destination and highlight the importance that tourists attach to individual ele- its unique attributes, so as to encourage tourists to visit ments that make up the overall tourist experience. The the target destination and personally convinced of the findings of this paper indicate that the quality of tour- richness of its offer. The analysis of the research indicates ism experience has a strong influence on tourists’ per- that if managers/marketers want to increase the level of ception of destination competitiveness. This means that perceived competitiveness of destinations in the minds if tourists experience high-quality tourism experience of tourists, it is necessary to generate a serious and at- filled with positive emotions and enthusiasm, it shall be tractive tourist offer, which will provide an unforgettable deemed that such destinations are better and more com- experience of high quality from the very beginning of the petitive than other destinations and they will gladly visit journey to the very end, filled with wonderful memories such destinations again. that will always remind tourists of the destination they visited and encourage them to visit it again. The tourism Tourism destination must be able to anticipate the offer created in such a manner focuses on the delivery of needs of tourists and to properly fulfill their requirements a memorable and high quality tourism experience that as destination competitiveness is directly related to tour- tourists will consider unique and such destination will ists’ expectations, activities, experiences and satisfaction. be perceived superior and more competitive than others. Tourism experience that includes the personal experience of natural and cultural resources of destinations, References tourist activities, nightlife and entertainment, quality of accommodation, hospitality and interact with the local Baker, D. A., & Crompton, J. L. (2000). Quality, satis- population and consumption of local specialties, creates faction and behaviour intentions. Annals of Tour- the perception of tourists and emotions associated with ism Research, 27(3), 785-804. doi:10.1016/S0160- the destination, and thus directly affect the competitive- 7383(99)00108-5 ness of the destination. Therefore, it is important that Balabanov, K. (2010). Ohrid. Skopje: Matica makedonska tourism destinations offer provides an opportunity for Skopje. 62 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Buhalis, D., & Foerste, M. (2015). SoCoMo Marketing for Oliver, R. (2012). Satisfaction: A Behavioral Perspective on Travel and Tourism: empowering co-creation of val- the Consumer. London: Routledge. ue. Journal of Destination Marketing & Management, Prebensen, N., Chen, J., & Uysal, M. (2014). Creating Ex- 4(3), 151-161. doi:10.1016/j.jdmm.2015.04.001 perience Value in Tourism. Boston: CABI Publish- Cohen, E., & Cohen, S.A. (2012). Current sociological ing. theories and issues in tourism. Annals of Tour- Ritchie, J.R.B., & Crouch, G. (2012). Competitiveness and ism Research, 39(4), 2177-2202. doi:10.1016/j.an- Tourism. Massachusetts: Edward Elgar Publishing. nals.2012.07.009 Vasilevich, P., & Czetyrbok, C. (2015). Consumer Psychol- Deliso, C. (2007). Hidden Macedonia: The mystic lakes of ogy of Tourism, Hospitality and Leisure. Arcler Press Ohrid and Prespa. London: Haus. LLC. Middleton, V.T.C., & Clarke, J. (2012). Marketing in Travel and Tourism. London: Routledge.

63 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Key issues on Tourism Destination Competitiveness

Improving the competitiveness of tourism offer of Vojvodina through fostering cooperation in cross-border regions

Verica Bulović, Abstract: Marija Najdić Cultural tourism is connected to the change of preferences of modern tourists and their demands for sustainable destination development and helps to affirm the importance of culture along with the improvement of intercultural communication, showing respect for other cultures and deepening of mutual 1 Singidunum University, understanding within different social entities. This paper aims to investigate Belgrade, Serbia the ways of strengthening and improving of cultural and historical heritage in 2The College of Tourism, order to enhance tourism attraction between cross border regions in Serbia Belgrade, Serbia (Vojvodina) and Hungary. In the long-run, it can enhance tourism development and generate new job opportunities, contribute to the development of relevant partnerships and networks needed for rural tourism development. Keywords: cultural tourism, cultural heritage, sustainable development, cross-border regions.

Introduction

In the world in which the process of globalization has led to dramatic economic, political and social changes, cultural tourism has significant role in the communication of fundamental values of intercultural dialogue, protection and promotion of cultural diversity and preservation of cultural heritage. Numerous local communities are constantly trying to identify and develop tangible and intangible elements of cultural heritage as the means to achieve a growing competitive advantage in an increasingly competitive tourism market. Traditional tourism forms have negative effects on sustainable development of a destination. In order to neutralize their influence, cultural tourism plays an important role in regeneration and protection of cultural heritage treasures and contribution to employment and sustainable economic growth. The use of cultural heritage, with minimum related investments, attracts a growing number of cultural tourists whose spending isn’t influenced by global market fluctuations. As part of increasing competitiveness of tourism regions and the Correspondence: Marija Najdić capacity for sustainable growth, a number of European initiatives is directed towards cross-border cooperation. The FRESCO project of the e-mail: cross-border Cooperation program Hungary – Serbia serves as an excel- [email protected] lent example of tourism-related initiatives. The FRESCO project is in line 64 Sitcon 2016 Doi: 10.15308/Sitcon-2016-64-68 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS with the communication from the Commission to the tourism as travelling with the aim of learning about for- European Parliament, the Council, the European Eco- eign cultures, presentation of one’s own artistic work, nomic and Social Committee and the Committee of the visits to festivals, cultural sightseeing, etc. In a certain Regions. This study may serve as an example to other sense, all tourism travelling can be seen as a form of cross--border initiatives, implemented through projects cultural tourism because they “satisfy tourists’ needs to and studies, or as an example of developing a joint tou- learn about foreign countries and raise the level of their rism projects. One of the objectives is to identify the cultural awareness and experiences through meeting need and cooperation possibilities in accordance with with other people. the development strategies of the municipalities of Bač, Therefore, cultural tourism is an interactive, dy- Serbia and Bácsborsód, Hungary for creation of joint namic and advancing process of people’s intercultural, tourism attraction of Vojvodina region. This is based on maintained by the rich diversity and heritage of different the research study of both municipalities’ endogenous cultures. From that view, culture can also be defined as resources to tourism potential together with the surro- a “living identity”. Culture and cultural heritage, as the unding settlements. expression of identity and history of the people to which they belong, can serve as a tool for forming the identity Theoretical framework and differentiation of destinations, which at the same time localize and globalize cultural and tourist experi- Cultural tourism enhances intercultural communica- ences that are characterized by the contact and mixing tion and promotes equality of different culture traditions of diverse cultures (Jelinčić, 2009). between social and ethnic groups. All over the world, lo- From an economic point of view, cultural tourism is cal communities are constantly promoting their cultural out of culture to tourism market with cultural and artis- assetsand developing new ways of communication with tic product that has cultural and economic value. Look- target segments in order to gain a comparative advantage ing from an organizational point of view, it is the inter- in the global tourism market. connection of culture and tourism - two complementary Tourism is an ideal field for the meeting of cultures. strands that need to establish partnership and join in Thus, cultural tourism aims to link the consumer (edu- the formation of joint products. Thus, we get the cul- cated tourists eager to be introduced to another cultu- tural economy, which has become one of the four fast- re) with the intellectual, spiritual and aesthetic-artistic est growing sectors in the world economy (Dojčinović, sphere of nation. In this context, cultural tourism factors 2005). Cultural tourism is therefore the movement of include: art, colonies, exhibitions, events, festivals, music, tourists motivated by cultural reasons, but also the op- dance, drama (theater and film), languages and literatu- portunity to promote revived cultural assets of a region, re. It needs to be mentioned that the concept of cultural locality, city, which provide tourist experience. tourism is very complex so there is the debate about how it could be defined (Richards, 2007; Shackleford, 2001). Usually, culture is analyzed through two components. research study The first involves exploring cultural categories such as: organization of time and space, relationship with nature The research issue is presented as the development and social organization. The second component inclu- of cultural tourism in cross-border regions and tenden- des the cultural principles (values, beliefs, social norms) cies of cultural tourism development in a multi-national that enable things (objects, phenomena) to be grouped community, each of which is directed towards preserv- into cultural categories, ranked and evaluated (Maričić, ing and developing its own cultural identity. The over- 2008). Both components play a very important role in the all objective of the paper is to identify the needs and planning of tourism development of a particular area sin- cooperation possibilities according to the development ce they give guidelines on how the local offer of a specific strategies of the municipalities of Bač, Serbia and Bács- country could be presented to certain types of tourists. borsód, Hungary for creation of joint tourism attraction One of possible definitions determines cultural tour- of Vojvodina region. This must be based on the research ism as the visits of persons who are outside the domestic study of both municipalities, endogenous resources with community and are completely or partially motivated a high tourism potential together with the surrounding by their interest in the historical, artistic, scientific or settlements. “lifestyle/heritage” offerings of a local community, a re- In order to find the answers to the above-given ques- gion, a group or an institution (Richards, 2007). The UN tions, we have conducted a primary inquiry in a form World Tourism Organization (1985) defines cultural of an interview with direct and indirect focus groups. 65 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Focus group research is based on mutual comparison of The questionnaire included 10 questions based on the attitudes of individuals in a group of selected leading which qualitative content analysis was carried out. The partially structured discussion (Fern, 2001). The research questions were related to the development of cultural is carried out with a small group of people relevant to the tourism and heritage in the surveyed regions and in research problem. A survey was conducted among five Vojvodina as a wider area. The respondents were asked focus groups with key stakeholders in tourism develop- to consider how they can take advantage of the development of the cross-border region: Bač and Bácsborsód ment potential of the region for the purpose of tourism Tourism Organizations (10 participants), representatives development of Vojvodina. In addition, a discussion of the city administration (10), participants in culture and development of tourism in the past or whether (10), private entrepreneurs (10) and local people (10). something has been done regarding the tourism devel- Identification of the focus groups was based on the spe- opment strategy of Vojvodina and how much of the cific role that they play in tourism development of the re- observed regions involved in this development. The gion. The main topics included the issue of the achieved respondents analysed the promotional material, Inter- level of development of tourism products, development net presentation of the region, presentation at fairs etc. of potential limitations and suggestions for possible im- Based on the study, a qualitative analysis was done as provement of tourism development of the region. the basis for development of tourism regions and posi- The inquiry was conducted during April and May tioning strategy for tourism development. of 2016 among 50 participants of the focus groups in cross- border regions. Our hypotesis was that the cul- Vojvodina as a tourism destination is a framework tural tourism of specific regions is primarily based on for considering the development of tourism cross-bor- multiethnicity that has given its contribution to archi- der regions. Vojvodina’s future tourism development tectural objects, gastronomy, multilingualism and crafts, is conceived as a distinctive tourism destination thanks in the sense of producing items and souvenirs. This is to its unique position, rich cultural traditions, idyllic the sign that the regions of Serbia (Vojvodina) and Hun- rural atmosphere, picturesque landscapes, gastro-oe- gary already have a certain cultural identity formed on nological offer and the kindness of people. The tourism the tourism market. development in Vojvodina is in line with the global tou- In order to survey experts, we used a semi-structured rism trends, thus indicating shortening of the length of questionnaire containing the questions related to their stay at the destination, the search for environmentally assessment of the current situation in the realm of cul- preserved areas, programs that are facing the preser- ture and tourism. Also, we asked them about the current vation of health and refreshment from the fast pace of cultural identity and the desired identity and image of life. All focus group participants agreed that the cro- the regions, about the contribution of cultural institu- ss-border region can better exploit their development tions to development of cultural tourism, regional coop- potential better promotion, networking of tourism ope- eration, manifestations in which the cultural institution rators, tourism aid for important projects and projects took part, number of visitors in the preceding year, and applying for EU pre-accession funds. According to the most importantly, virtues and flaws in the cultural offer respondents, the basic conditions for the development of the regions compared to other competitive destina- of tourism in the region are: clean environment (22%), tions. This interview also included the SWOT analysis of cultural and historical heritage (45%), the possibility of tourism potential of the region and the municipalities of active rest (20%), infrastructure and tourism facilities Bač and Bácsborsód. (13%). When asked about the system of values which exists in this area, the respondents believe that its ele- empirical results ments are: hospitality of local residents (26%), gastronomy, enology, ethnology (18%), conservation of the natural environment (12%), cultural and historical For this research paper, interiews were conducted heritage (36%), environment and anti-stress ambient with 50 representatives of different focus groups. The (8%), etc. We also asked them how to exploit tourism focus group research was conducted in an unstructured potential of the region, and the answers that we have way. The atmosphere during the discussion was relaxed, received confirm that it is necessary to invest more in and participants were encouraged to participate equally the promotion, gather all tourism stakeholders and in the discussion. The duration of the discussion was 60 support projects for pre-accession funds. As regards minutes and the results obtained enabled performing a the most important tourism products of the region, the qualitative and quantitative analysis. respondents highlighted the following: events and ma- 66 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS nifestations, ethnic and religious tourism, hunting and national tourism attraction and the potential space for fishing, cultural tourism and special interests tourism various cultural manifestations. In this region, there is (biking). Tourism workers considered that it is essential the Franciscan monastery in Bač, Bođani Monastery, to develop the cultural and historical heritage tours as the Castle of Latinovits family in Bácsborsód, and also well as gastronomic tours.. the chapel of Latinovits family which has been renova- First of all, participation of focus groups in cross- ted, and boasts quiet and gentle landscape and nume- border regions is highly positive (83%) about the cultu- rous events etc. ral and heritage tourism offer. The reason lies in the fact The Region of Bač boasts rich cultural and histori- that these institutions also recognize the importance of cal heritage, immovable and movable cultural proper- cross-border cooperation with the aim of realizing new ty. It is rich in medieval period with an impressive old programs and emitting those to the wider public. The- fortress Bač with the Barbican and the outskirts, the se cross border regions have always been recognizable preserved architectural heritage dating from the 12th for their high level of culture, which distinguishes it to the 19th century period, reflecting the influence of and gives it a special hallmark. The multi-ethnicity and Romanesque, Gothic, Renaissance, Byzantine and Isla- variety factor, which is present not only in the ethnic mic art, Baroque and unequivocally testifies the cultural composition of the population, but also in the institu- diversity of the region, which represents a link between tions that care about culture, also contributes to that. the cultures and traditions of the Balkans. It still preser- These institutions look after the tradition and heritage, ves rich tangible and intangible heritage of the culture while opening the door for new and young authors, the of life and work of the Bačka region - songs, costumes, future carriers of culture, so they can expose, develop customs, handicrafts, rural architecture and agricultu- and improve themselves, which will be very important re. Tourism attractions of Bač contribute to different in the future – because the culture of the future hides people whose richness of tradition and customs attract in the youth of today. tourists and events - a variety of attractive events, cul- Certain institutions primarily foster artistic pro- tural and artistic events, fairs, river Danube canal DTD grams directed towards the local audience, but these with walkways and artificial attractions. programs are self-organized, without initiative and co- Tourism attraction of Bač and the surrounding tou- operation with other institutions. The question of tole- rism area is only partially valorized as tourism and it is rance between the different ethnicities in the regions of far from optimal destination tourism product. Potential Serbia (Vojvodina) and Hungary caused divided opini- religious tourism is hardly broached, and the potential ons. Most institutions viewed the question from a perfor developing a cultural tourism, which, above all, lays sonal angle and the angle of contribution to tolerance, in the fortress of Bač, has yet to develop, with help of and so assessed this phenomenon relatively positively, the investments from the FRESCO project. Due to its emphasizing their maximal engagement in working favorable location near the Danube (waterway 43 km), with the public. First and foremost, it’s the fact of mul- the large markets of Belgrade and Novi Sad and proxi- ticulturalism and diversity that has been nurtured by mity to the boarder region, there is a huge potential for these regions for centuries. Numerous festivals are held developing tourism on the water (Danube region). in a peaceful environment and most of them place folk music, folk games, folk motives, traditions and heritage conclusion as their central focus. In this way, many citizens can acquaint themselves with their fellow citizens’ cultures, Culture is a fundamental factor in development of while the tourists can do the same with local culture, any country. Namely, every society can be distinguished which strengthens the general level of tolerance. by its specificity, which also marks the potential tourists’ SWOT analysis is performed on the basis of the train of thought before travelling to a certain destination. analysis (socio-demographic conditions, infrastructu- But what are the elements of culture, how is culture built re, and level of economic development, tourism de- and what is the primary motive of a society by which it mand and supply, attraction base), several site visits, can most easily be distinguished and differentiated from interviews with the key stakeholders of tourism deve- others? The narrow level of culture presented by a soci- lopment, and in consultation with the relevant literatu- ety is built from a large number of motives – tradition, re. There is no doubt that Bacs and Bácsborsód possess gastronomy and taste, architecture, history (in the views necessary elements for development of tourism poten- of others – conflicts, previous wars), and also the educa- tial. Some are of the opinion that Bačka fortress is a tion level of the population, as well as the mentality itself, 67 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

which is partly a result of the above given items, and references partly of innate characteristics. By striving to provide answers to such questions, in Dojčinović, Đ., V. (2005). Kulturni turizam: menadžmen- an unorganized multicultural destination, non-harmo- ti razvojne strategije. Beograd: CLIO. nized interethnic relations would cause an inevitable Dexter, Lord, G. (1999). The Power of cultural tourism. dispute, from which reservations would be formed and Wisconsin, Lac du Flambeau. the sides would come into conflict. On the other hand, European Travel Commission (2005). City tourism & the region of Vojvodina can be proud of the fact that culture – The European Experience. Madrid: World its multiculturalism has been formed over centuries, Tourism Organization. and managed to bridge the gap between various eth- Fern, E. F. (2001). Advanced Focus Group Research, Lon- nicities which found themselves all in one place due to don, Sage publications. turbulent historical events. Modern society brings new Font, X., Carey, B. (2005). Marketing sustainable Touri- challenges that pose new threats to peaceful ethnic re- sm Products. Region of Tuscany: Leeds Metropolitan University. lations, and have an effect on the departure of members of certain minorities, which increases the numbers of Golubović, Z., Jarić, I. (2010). Kultura i preobražaj Srbije. Beograd: Res publica i Službeni glasnik. the dominant ethnic community, and which wouldn’t present a problem were we not aspiring to keep an Jelinčić, D.A. (2009). Abeceda kulturnog turizma. Zagreb: Meandar media. authentic multiethnic environment. The lack of a strong Johnatan M. Harris (2009). Ekonomija životne sredine i intellectual caste in the region’s government and admi- prirodnih resursa. Beograd: Data status. nistration, the vanished civic middle class, the very class Morača, S. (2006). Strategija razvoja klastera Vojvodine. that built and nourished the culture, as well as indiffe- Novi Sad: Centar za konkurentnost i razvoj klastera. rence of investors towards supporting new endeavors, Maričić B., (2008). Ponašanje potrošača, CID Ekonomski all present a serious threat to the tourism foundation, fakultet. pp- 33 and by that, to cultural tourism in Bač and Bácsborsód. Pejović, A., Živadinović, B., Lazarević, G., Knežević, I., Therefore, this research paper wants to set up a con- Lazović, M., Mirić, O. (2011) IPA – Instrument ceptual framework for the holders of economic, social za predpristupnu pomoć EU 2007-2013. Beograd: and tourism policy in the cross-border regions. Thus, it Evropski pokret – Srbija. will become a guide for the design of a set of activities Reisinger, Y. (2009). International tourism: Cultures and that has to be systemic and long-term development of behavior. USA: Elsevier Ltd. tourism products and infrastructure, and manage the Republika Srbija – Autonomna pokrajina Vojvodina – iz- tourism development. It is a document incorporating vršno veće (2009) Marketing strategija turizmaVoj- all elements of tourism development of this area as for vodine (Istraživačko-razvojni projekat). Novi Sad: making business and development decisions at the level Sekretarijatzaprivredu. of entrepreneurship, particularly tourism companies and Richards, G. (2007). ATLAS Cultural Tourism Survey, potential investors. Summary Report 2007. New York: THHP. Shackleford, P. (2001). The social context of cultural tourism KéKfolyóirat, Budapest, pp. 29- 41. Stojanović, R. (2009). The Promotion of cultural tourism on the level of Belgrade as a Tourist Destination. Be- ograd: Sekretarijat za ekonomiju. World Tourism Organization and European Travel Com- mission (2005). City Tourism & Culture – The Eu- ropean Experience, p. 137, www.etc-corporate.org

68 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Key issues on Tourism Destination Competitiveness

INFLUENCE OF NATIONAL MENTALITY ON THE COMPETITIVENESS OF TOURISM DESTINATIONS: A CASE STUDY OF AZERBAIJAN AND GEORGIA

Larisa Korganashvili1, Abstract: Natavan Mammadova 2 Despite strengthening of the globalisation process, our national factor is the utmost difficult problem, on the basis of which inter-ethnic relations are exacerbated, dangerous places are created and terrorist acts are provoked. National problems and inter-ethnic conflicts have a negative impact on tourism 1 Ivane Javakhishvili Tbilisi State development. In connection with this understanding of the mentality of own University, Tbilisi, Georgia people and intercultural relations, “tourist-local population” and prevention 2Baku Business University, of ethnic conflicts is an urgent problem. Baku, Azerbaijan The aim of this study is to examine and identify the importance of national mentality in improving the international competitiveness of tourism destinations on the examples of Georgia and Azerbaijan, as countries with areas of inter-ethnic conflicts. The paper analyses the competitiveness of Azerbaijan and Georgia as tourism destinations and shows the mentality of value in tourism development and enhanced competitiveness of tourism destinations.

Keywords: tourism, destination, mentality, competitiveness, Azerbaijan, Georgia.

Introduction

In recent years, tourism has become a global socio-economic phenomenon, which has a significant impact on the world economy and development of many countries, as a factor improving the quality of life of the inhabitants of the planet as a whole and individual countries - in particular. According to the World Travel & Tourism Council (WTTC), the Travel & Tourism (T&T) sector is expected to continue growing at 4% annually, more rapidly than financial services, transport and manufacturing. The direct contribution of travel & tourism to the world’s GDP was USD 2,229.8 bn (3.0% of total GDP) in 2015, and the total contribution - USD 7,170.3 bn (9.8% of GDP). Travel & Tourism directly supported 107,833,000 jobs (3.6% of total employment) and the total contribution was 9.5% of total employment (283,578,000 jobs). Visitor exports generated USD 1,383.8 bn (5.7% of total exports. Travel & Tourism investment was USD 814.4 bn, or 4.3% of total investment (WTTC, 2016). According Correspondence: Larisa Korganashvili to the UNWTO World Tourism Barometer, international tourist arrivals rose by 4.4 % in 2015 to reach a total of 1,184 million in 2015. Some e-mail: 50 million or more tourists (overnight visitors) travelled to international [email protected] destinations around the world last year compared to 2014. 2015 marks 69 Sitcon 2016 Doi: 10.15308/Sitcon-2016-69-74 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

the 6th consecutive year of above-average growth, with The development of tourism is directly linked to international arrivals increasing by 4% or more every destination competitiveness. The issue of competitive- year since the post-crisis year of 2010 (UNWTO, 2016). ness of tourism destinations has been explored by many Tourism market has become global, as a result new researchers. As a result of the systematization of their opportunities for development of international tourism, work, the following are the main research areas of tour- for diversification of the tourism product, increasing the ism destination competitiveness. awareness about the possibilities of tourist choice among Research on the basis of geographical approaches. In tourism products, for the expansion of opportunities of this regard, the following works should be noted: The free movement around the world. International tourism United States (Ahmed & Krohn), Sun/Lost City, South contributes to the formation of a new type of spatial rela- Africa (Botha, Crompton & Kim), Las Vegas (Chon & tions and cultural enrichment of countries and nations. Mayer), Australia (Dwyer, Livaic & Mellor), South Ko- As regards the importance of tourism in the global rea and Australia (Kim, Choi, Moore, Dwyer, Faulkner, economy, there imposes a question related to the role of Mellor & Livaic), and others. Azerbaijan and Georgia in the global tourism market. On the basis of different methodological approaches, In recent years, tourism in Azerbaijan and Georgia has one should note the following aspects: destination po- had a momentum of development, but both countries sitioning (Chacko), destination management systems are faced with fierce competition in the global tourism (Baker, Hayzelden & Sussmann), price competitiveness market. Therefore, the agenda is the issue of increasing (Dwyer, Forsyth, Rao, Stevens), quality management the global competitiveness of Azerbaijan and Georgia, (Go & Govers), nature-based tourism (Huybers & Ben- as tourism destinations. nett), strategic management (Jamal & Getz; Soteriou & Tourism destination competitiveness is affected by Roberts), and others. The methods of the World Eco- numerous factors, including the national mentality. The nomic Forum are among the most common methodo- national factor is the great challenge of our time, inter- logical approaches to competitiveness assessment. ethnic relations are exacerbated from it, hotbeds of dan- The studies based on the conceptual models. Name- ger are created and terrorist acts are provoked. All this ly, based on the conceptual models,the model proposed has a negative impact on tourism development. Under- by Crouch and Ritchie should be noted (Crouch & standing the national peculiarities of mentality and in- Ritchie, 1993, 2000, 2003; Crouch, 2007). Their aim has tercultural relations “tourist-local population,” the pre- been to develop a conceptual model based on the theo- vention of ethnic conflict is an urgent problem. In this ries of comparative advantage (Smith, 1776; Ricardo, regard, the aim of this study is to examine and identify 1817) and competitive advantage (Porter, 1990). Model the importance of national mentality in improving the Crouch and Ritchie was the main theoretical basis for international competitiveness of tourism destinations the research on tourism destinations. The literature has on the examples of Azerbaijan and Georgia, as countries widely explored the concept of cluster area competitive- with the territory of interethnic conflicts. ness (destination), which links the competitiveness of the territory (destination) with the presence of a cluster Results and discussion of related industries. The basis of this concept is derived from the system of the international competitiveness of The post-Soviet development of Azerbaijan and Geor- the determinant of Porter (1990, pp. 74-75). The start- gia is related to the transition from a command econ- ing point is that the tourism destination competitiveness omy to a market system, which is characterized by a represents “ability of the place to optimize its attractive- high degree of openness. In the context of globalization ness for residents and non-residents, to deliver quality, and open economy, sustainable economic growth of the country and its success in the world markets depends on innovative, and attractive tourism services to consumers the international competitiveness of the national econ- and to gain market shares on the domestic and global omy. The World Economic Forum defines competitive- market places, while ensuring that the available re- ness as a set of institutions, policies, and factors that de- sources supporting tourism are used efficiently and in a termine the level of productivity of an economy, which sustainable way” (Dupeyras & MacCallum, 2013, p. 14). in turn sets the level of prosperity that the country can Tourism is a complex geospatial and socio-economic reach (WEF, 2016, p. 4). Along with the study of issues system, so the analysis of the trends of its development of global competitiveness of countries, WEF defines the and improvement should be primarily based on a sys- travel & tourism competitiveness. tematic approach. Tourism as a system was considered 70 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS by N. Leiper, Prof. of Meissen University (Auckland, GDP, the main place was occupied by Industry - 58.3%, New Zealand) (Leiper, 2004). Leiper (2004) views tour- Services accounted for 36.0%, and Agriculture - 5.7%. ism as an open system encompassing five interelated For Georgia, these figures are 24.4, 66.4 and 9.2%, re- segments: one human element (tourists), three geo- spectively [World Bank]. The share of travel services of graphic elements (traveler-generating region, tourism Azerbaijan exports is 57.0%, imports - 29.5%, and for destination region, and transit route), and one indus- Georgia 60.5 and 19.0%, respectively (WTO). trial element (tourist industries). Political, economic and technological environments represent the external forces. This model was initiated by Leiper in 1979. The label “whole tourism systems” was adapted when Getz (1986) coined the term “whole system models” (p. 25) of tourism in his review of tourism models. The most recent version of the tourism systems model is disclosed in Leiper (2004). Leiper’s (1979) tourism systems model was suggested to mitigate tourism research fragmenta- tion, an issue he considered to be the result of its multidisciplinary nature. The elements of the original model put forward in 1979 are almost the same as this most recent version (Leiper, 2004), with the exception of the original industrial element, the tourist “industry,” which Leiper (2004) now refers to as “tourist industries” (La- mont, 2009). Figure 1. Ranking of GCI of Azerbaijan and Georgia A tourist as the central point in the N. Leyper’s model, who wishes to carry out a travel, triggers the entire tourism system (Gerasimenko, 2013). It is this desire that creates the demand for tourism services in the region. In turn, this desire should arise because of the attractive tourism destination in the region. Almost all countries in the world are offering their services in the global tourism market. Each of them has its own specific way and contributes to the diversity of tourist motivations, to differentiation of supply and demand, the formation of various market segments and niches. In this regard, tourism market in Azerbaijan and Georgia is developing despite fierce competition. According to the ranking of WEF GCI for the period 2015-2016, Azerbaijan occupies the 40th place among 140 countries and is 26 positions ahead of Georgia, Figure 2. Ranking of T&TCI of Azerbaijan and Georgia though, compared with a rating of 2015-2016, it has deteriorated its position for 2 levels, and it then assumed the 38th place among 148 countries (Figure 1). Despite Fig. 3 shows the components of T & TCI of Azer- the fact that GCI of Azerbaijan is ahead of Georgia, baijan and Georgia. The highest score points in Azer- on the WEF T & TCI in 2015, it is 13 positions behind baijan are on the Health and Hygiene - 5.96, Safety and Georgia. In the ranking of 2008, this difference was 7 Security - 5.83, Price Competitiveness - 4.78; Georgia positions in 2009 - 3, in 2011 - 10 and in 2013 - 12 (Fig- - on Health and Hygiene - 6.12, Safety and Security ure 2). The higher position of Georgia can be attributed - 5.96, and Business Environment - 4.91. Like Azerba- to the fact that tourism is a priority for its economy. ijan, Georgia has the lowest scores for Cultural Resour- According to prioritization of travel & tourism, Geor- ces and Business Travel (1.53 and 1.45, respectively) gia occupies 53rd place, Azerbaijan – 58th (WEF, 2016, and Natural Resources (2.03 and 2.07, respectively) pp. 85, 155). In 2014, in the structure of Azerbaijan’s (Figure 3). 71 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

total contribution – 10.5%, those directly employed in the tourism sector with 2.6% of total employment, total contribution – 9.5% of total employment. Visitor exports accounted for 13.7% of total exports, and Invest- ment – 2.9% of total investment (Table 1). The tourism sector is the specific area of activity, characterized by economic and social aspects influencing the formation of a competitive tourism product. The provision of tourism services is carried out in a particular tourism destination, where the tourist has contacts with the local population. In this regard, it is important for tourists to have a friendly attitude towards the local population. The relationship between “tourist-locals” is a difficult problem, without which it is impossible to develop tourism and increase competitiveness of a tourism Figure 3. Composition of T&TCI of Azerbaijan and product and most destinations. Georgia Everyday coexistence of foreign tourists and the local population - representatives of different cultures requires understanding the essence of the national mentality, the According to the World Travel and Tourism Coun- search for new approaches to its assessment, under- cil in 2015, the direct contribution of travel and tour- standing its positive and negative aspects, identifying ism in Georgia’s GDP amounted to GEL2, 195.9mn opportunities for mentality changes within the frame of (7.1% of total GDP), and total contributions – GEL7, the progressive forces of the society. National mental- 310.2mn (23.5% of GDP). This industry directly em- ity is a socio-psychological state of the ethnic commu- ploys 347,000 people (20.1% of total employment), and nity (nation, nationality), which is based on the current with the related industries – 347,000 people (20.1% of society’s existing knowledge, beliefs, values, and other total employment) (WTTC, 2016). Accordingly, tour- social traits, and reflects the results of long-term and ism is increasingly becoming a factor of multiplier ef- sustainable impact of the natural geographic and socio- fect on the economy and social sphere of the country. economic conditions of formation and development of Visitor exports accounted for 36.4% of total exports, and this community. Each ethnic group, state, nation has Investment – 3.4% of total investment. The indicators specific historical and economic developmental path, for Azerbaijan were much lower: the direct contribution own culture, own behavior. Understanding the ethnic of travel and tourism accounted for 2.8% of total GDP, characteristics of the people, respect for the culture and

Table 1. Contribution of travel and tourism to the economies of Azerbaijan and Georgia

Azerbaijan Georgia

GDP: direct AZN1,521.3mn (2.8% of total GDP) GEL2,195.9mn (7.1% of total GDP) contribution

GDP: total contribution AZN5,586.8mn (10.5% of GDP) GEL7,310.2mn (23.5% of GDP)

Employment: direct 118,500 jobs (2.6% of total employ- 100,500 jobs (5.8% of total employ- contribution ment) ment) Employment: total 438,000 jobs (9.5% of total employ- 347,000 jobs (20.1% of total employ- contribution ment) ment)

Visitor exports AZN2,678.4mn (13.7% of total exports) GEL4,701.0mn (36.4% of total exports)

GEL231.7mn, or 3.4% of total invest- Investment AZN434.1mn (2.9% of total investment) ment Source: WTTC, Azerbaijan (2016), **WTTC, Georgia (2016) 72 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS values of other people, helps to overcome ethnic barriers ing are more negative than positive traits. However, the and conflicts. Ethnic conflict is an undesirable phenom- Azerbaijani mentality is characterized by a desire for enon in life of any society as it plays the role of a brake hoarding. In addition, the success in the Azerbaijani and in its development, creates social instability and causes Georgian culture is not the result of objective processes, serious damage to the country’s economy and reduces its nor the result of their own efforts, but rather the result competitiveness. The people of Azerbaijan and Georgia of personal connections or “God given”. At the same have experienced negative effects of international con- time, freedom is understood as the ability to do what flicts (Karabakh, Georgian-Abkhazian and Georgian-Os- you want. For the majority of the population, there is a setian conflicts), which are expressed not only as human deep relationship in the chain concepts of “freedom - in- victims, but are complicated by large flows of refugees, dependence - responsibility”. Based on this, until recent destruction of material and cultural values etc. The pres- days, violation of law has been common and therefore ence of conflict areas creates serious problems for tour- - the society was criminalized. ism development, hinders the full satisfaction of tourist Nowadays, the elements of Western market eco- needs and reduces the overall image of the country in the nomic thinking exert a considerable bearing on the eyes of the world community. people’s conduct (especially the younger generation): a The transformation processes taking place in Azer- sense of ownership, personal economic independence, baijan and Georgia contributed to the growth of nation- initiative, pragmatism, flexibility, adaptability, willin- al consciousness, increased the attention to the preser- gness to act in a competitive environment. Nonethe- vation and development of national cultures, revival of less, the economic conduct of an individual in Azer- popular traditions and religious beliefs. As a result, this baijan and Georgia differs from the economic conduct provides a fertile ground for the emergence of new inter- of Western man. Rationalism of economic conduct in national conflicts, which in order to prevent particular the Western European variant is equal to the desire for attention should be paid to the education of tolerance to gain and it arises from the continuous comparison of representatives of other nations. Particular emphasis is earnings and expenses that seem to be normal conduct. In Azerbaijan and Georgia, in view of the Soviet past, placed on such characteristic feature of the Azerbaijani social and historical features of rationalism could not and Georgian people, as the national tolerance. be found in the Western European version. Economic The essence of the Azerbaijani and Georgian na- conduct is frequently irrational and economic benefits tional mentality is multifaceted. As Azerbaijanis and are sometimes overlooked due to the effects of subjec- Georgians are characterized by open heart, hospitality, tive perception of others and engagement in the collec- maximalist and extreme, the pursuit of absolute values, tive spirit. This distinctive feature of the inhabitants of love of freedom and at the same time, willingness to Azerbaijan and Georgia introduces uncertainties in the borrow cultural values (both positive and negative) of situation, coupled with the economic choice. In other Western civilization. words, economic conduct of individuals from Azerbai- Christianity represents the foundation for the for- jan and Georgia should be observed in a more rational mation of the Georgian mentality, triggered by Western manner since the features of the Azerbaijan and Georgi- civilization and imposed on the spirit of the East. As a an mentality and economic thinking are the foundation result, it formed a special mentality, the properties of of economic conduct. Accordingly, when we consider which can be called a paradox, perception of the world the mentality of the population of Azerbaijan and Ge- “this and that,” in sharp contrast with the Western orgia, it is of vital importance to start from the position mentality, which is characterized by an approach from to alter the paradigm of rationality and introduction of a position of “either-or”. This property of the Georgi- subjectivity, which suggests that the individual himself an mentality shows the features of economic behavior chooses between alternatives, with an emphasis on own of the population and it is an important factor in the assessment of benefits and expenses. process of entrepreneurship. In turn, the Azerbaijani Considerable attention needs to be devoted to this mentality is based on Islam, but despite that it has many characteristic of the mentality of the Azerbaijani and similar characteristics to the Georgian mentality. The Georgian people, as a special commitment to education residents of Azerbaijan and Georgia are characterized and accumulation of new knowledge. It is this feature by the depth of the inner life, entrustment of partial that creates the foundation for improving the competi- personal liberty to the team, a high degree of non-eco- tiveness of not only the travel and tourism industry, nomic components of entrepreneurial success. Accord- but also the global competitiveness of Azerbaijan and ing to the Georgian mentality, ownership and hoard- Georgia. 73 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

The study of the influence of mentality on tourism Lamont, M.J. (2009). Independent bicycle tourism: a whole destination competitiveness reveals a new perspective tourism systems perspective. Tourism Analysis, 14(5), on this topic. The problem presented herein has pros- 605-620. doi:10.3727/108354209X12597959359176 pects for further deepening. In particular, research is Leiper, N. (2004). Tourism Management. Australia: Pear- ongoing and will be able to increase its validity through son Education. a more detailed examination of the specifics of the Azer- Porter, M.E. (1990). The competitive advantage of nations. baijani and Georgian national mentality and its impact New York: Free Press. on improving the competitiveness of Azerbaijan and Ritchie, J.R.B., & Crouch, G.I. (1993). Competitiveness in Georgia, as tourism destinations. International Tourism: A Framework for Understan- ding and Analysis. Proceedings of the 43rd Congress Conclusion of the Association Internationale d’Experts Scienti- fique du Tourisme, 17-23 October, San Carlos de Bariloche, Argentina (pp. 23-71). In recent years, the influence of the national men- Ritchie, J.R.B., & Crouch, G.I. (2000). The Competitive tality on the economic development of the country has Destination: A Sustainability Perspective. Tourism increased. Accounting for the factors of the national Management, 21(1), 1-7. mentality is particularly important in a tourism desti- Ritchie, B., & Crouch, G.I. (2003). The competitive destina- nation, as there are conflicting interests of different cul- tion: A sustainable tourism perspective. Wallingford: tures - foreign tourists and the local population. Tour- CABI Publishing. ists wanting to get maximum satisfaction from their UNWTO. (2016). International tourist arrivals up 4% re- travels may become catalysts for inter-ethnic conflicts. ach a record 1.2 billion in 2015. Retrieved April 6, In turn, the centers of inter-ethnic conflicts reduce the 2016 from competitiveness of tourism destinations and the overall http://media.unwto.org/press-release/2016-01-18/ image of the country. international-tourist-arrivals-4-reach-record- Azerbaijan and Georgia are the countries with inter- 12-billion-2015 ethnic conflicts (Karabakh, Georgian-Abkhazian and World Economic Forum. (2015a). The Travel & Tourism Georgian-Ossetian) lasting for many years, despite the Competitiveness Report 2015. Geneva: World Econo- fact that the people of these countries are characteri- mic Forum. zed by national tolerance, an open heart and hospita- World Economic Forum. (2015b). The Global Competitive- lity. Accordingly, the mentality of the Azerbaijani and ness Report 2015-2016. Retrieved April 6, 2016 from Georgian people may become one of the conditions to http://www3.weforum.org/docs/gcr/2015-2016/Glo- bal_Competitiveness_Report_2015-2016.pdf prevent the escalation of ethnic conflicts and increase the WTO. (2015). Azerbaijan. Retrieved April 6, 2016 from competitiveness of Azerbaijan and Georgia as tourism http://stat.wto.org/CountryProfiles/AZ_e.htm destinations. WTO. (2015). Georgia. Retrieved April 6, 2016 from http://stat.wto.org/CountryProfile/WSDBCoun- References tryPFView.aspx?Language=E&Country=GE WTTC. (2016). Travel & Tourism Economic Impact Rese- Crouch, G.I. (2007). Modelling destination competitive- arch 2016: Azerbaijan. Retrieved April 6, 2016 from ness: a survey and analysis of the impact of com- http://www.wttc.org/-/media/files/reports/eco- petitiveness attributes. Retrieved April 6, 2016 from nomic-impact-research/countries-2016/azerbai- http://www.sustainabletourismonline.com/awms/ jan2016.pdf Upload/Resource/bookshop/Crouch_modelDest- WTTC. (2016). Travel & Tourism Economic Impact Resear- nComp-web.pdf ch 2016: Georgia. Retrieved April 6, 2016 from Dupeyras, A., & MacCallum, N. (2013). Indicators for http://www.wttc.org/-/media/files/reports/econo- Measuring Competitiveness in Tourism: A Guid- mic-impact-research/countries-2016/georgia2016. ance Document. OECD Tourism Papers, 2013/02. pdf doi:10.1787/5k47t9q2t923-en WTTC. (2016). Travel & Tourism Economic Impact Resear- Gerasimenko, V.G. (2013). Theory of system approach to ch 2016: World. Retrieved April 6, 2016 from the research. Retrieved April 6, 2016 from http:// http://www.wttc.org/-/media/files/reports/economic- dspace.oneu.edu.ua/jspui/handle/123456789/553 impact-research/regions-2016/world2016.pdf Getz, D. (1986). Models in tourism planning: Towards integration of theory and practice. Tourism Manage- ment, 7(1), 21-32. 74 Key Issues on Tourism Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Quality in Tourism and Hospitality

Integrated Quality Management for MICE Destinations

Renata Pindžo1,2, Abstract: Quality is one of the key factors and determinants for destination competitive- 3 Igor Kovačević , ness and is considered a decisive competitive instrument vital for the success Bojan Zečević3 of a destination. Destinations that are successful in meetings, incentives, conferences and events/exhibitions (MICE) industry understand the synergies of leisure tourism and business events, as well as their strong differences, especially 1Singidunum University, Faculty of having in mind how to market the product. MICE differs from leisure tour- Economics, Finance and Administration, ism in several aspects – motive and purpose of visit, decision making process, Belgrade, Serbia travel funding, period of traveling, supply stakeholders and requires a distinct 2 Ministry of Trade, Tourism and strategy for attracting meetings. Destination quality must be considered as one Telecommunications, Serbia of the priority performance parameters in the long-term vision and tourism 3University of Belgrade, policy at the national level. Quality in the meetings industry can be achieved Faculty of Economics, through commitment of all stakeholders and joint activities directed towards Belgrade, Serbia “customer satisfaction”. A convention bureau is a type of a destination management organization focused on managing meetings industry stakeholders in order to increase the volume of meetings at a destination. An important task of the convention bureau is to implement certain integrated quality management steps in order to have the standardized offer of the entire destination in the eyes of international clients. These steps include the activities such as developing partnership agreements with industry stakeholders, standardizing level of services and increasing the awareness of convention bureau activities to the public. This convention bureau enables it to raise the chance for the international client to choose a destination for some future event. Methodol- ogy is based on the case study analysis of the Serbia Convention Bureau that is implementing certain IQM steps in its operational and strategic activities. Keywords: quality management, destinations, MICE, convention bureau, customer satisfaction. Introduction

Tourism is a global phenomenon, which represents one of the most important sectors of our time, an engine of economic growth, employment and investments (Unković & Zečević, 2016), as well as general social progress and environmental sustainability (Petković & Pindžo, 2012, p. 117). Furthermore, tourism is a major export sector in many countries. Over Correspondence: Renata Pindžo the past 60 years, tourism industry has recorded significant growth and diversification, proving to be one of the most growing economic sectors e-mail: worldwide (Petković et al., 2015, p. 123). A lot of new tourism destinations [email protected] have emerged alongside the traditional ones in Europe and North America. 75 Sitcon 2016 Doi: 10.15308/Sitcon-2016-75-82 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Tourism is a resilient industry (Cochrane, 2010), contin- pra-structure mainly), ancillary services (general hard uing to grow even during the period of economic crisis and soft infrastructure), accessibility, available (tourist) (Petković et al., 2016, p. 189). In 2015, the growth was packages and activities. Middleton and Clarke (2001) observed in the number of international arrivals, which state that attractions, amenities, accessibility, image represents the sixth consecutive year of record growth and perception of a destination and the price are the with 1,184 million international tourist arrivals i.e. over- elements that largely determine one destination. The night visitors (from 6.6% in 2010 compared to 2009 to UNWTO’s (2007, pp. 1-2) standpoint is that the attrac- 4.4% in 2015 compared to 2014). The same trend con- tions, amenities, accessibility, image, price and human tinued in the first four months of 2016, when the num- resources are the essential elements that severely affect ber of international arrivals recorded growth of almost the definition and determination of a destination. The 5% (UNWTO, 2016a). Modern tourism development is practice of developed tourism countries points to the based on the destination development, permanent overall necessity of introduction of organized destination man- quality management, tourism offer and services improve- agement (primarily through the establishment of desti- ment. According to the UNWTO (2016b), quality is one nation management organization) as the basic precon- of the key factors and determinants for destination com- dition for raising the competitiveness of destinations as petitiveness, and a decisive competitive instrument vital well as the introduction and development of integrated for the success of a tourism destination. The UNWTO quality system. According to the European Commission (2016b) defines quality as “the result of a process which (2000, p. 13), the concept of IQM was developed dur- implies the satisfaction of all tourism product and service ing the 1990s as a relatively new approach to tourism needs, requirements and expectations of the consumer destination management, which represented a response at an acceptable price, in conformity with mutually ac- to competitive pressures on both the supply and the de- cepted contractual conditions and the implicit underlying mand side, a lack of the specified quality management factors such as safety and security, hygiene, accessibility, in the tertiary sector and a complex nature of the over- communication, infrastructure and public amenities and all quality management of tourism destinations due to services. It also involves the aspects of ethics, transpar- various factors: the number of entities (stakeholders) ency and respect towards the human, natural and cultural involved in production and marketing the products and environment”. Quality is achieved through a combina- services in a destination and the problem of pinpointing tion of better processes, better approaches, techniques and characterising tourists expectations. Furthermore, and efforts of those who create products and services the European Commission (2000, p. 19) states that the (Barković, 2011, pp. 192-193). IQM approach recommended for tourism destinations includes five main levels: Integrated Destination Management ◆◆ partner identification (definition of the common As the Basis of Modern MICE project, determination of the lead partner, divi- tourism Development sion of responsibilities among all partners), ◆◆ decision making about taking action (definition The UNWTO Tourism Destination Management of strategy and polices referring to all the key Think Tank in 2002 defined a (local) tourism destina- elements such as human and natural resources, tion as “a physical space where a tourist spends at least attractions, cultural heritage etc., all stakehold- one overnight. It includes tourism products such as ers and their planned roles and tasks, making the support services and attractions and tourist resources plan of activities), within one day’s return travel time. It has physical and ◆◆ implementation of the agreed action (before, dur- administrative boundaries defining its management, ing and after the tourists visit), and images and perceptions defining its market com- ◆◆ measurement of the effects of undertaken activi- petitiveness” (UNWTO, 2007, p. 1). In a broader sense, ties (determination and measurement of the main destinations are also countries, regions, human settle- indicators) and ments and other areas that are typical with their high ◆◆ evaluation and adjustments of the results (the ba- concentration of tourists, developed services and other sis for recommendation for all stakeholders from tourism infrastructure, the result of which is a great the public and private sector). long-term concentration of visitors (Pásková & Zelenka, Destination and its understanding of the importance 2002). Buhalis (2000) defines a tourism destination with of the synergies as well as strong differences play the key six components known as “6 As”: attractions (cultural role in MICE industry. According to Redor (2016), MICE heritage and nature resources), amenities (tourism su- tourism differs from leisure tourism (Fig. 1). The most 76 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Leisure Tourism Business events/MICE

. Business networking and information sharing . Fun and leisure Purpose of Visit . Education & certification . Exploring new destination and learning new cultures . Business networking

. State of domestic economy . Affordability . Quality of Business Events-related infrastructure, . Uniqueness of destination and culture Main Drivers such as convention/ meeting venues and hotels . Kind of leisure activities available . Affordability and connectivity

. Individual tourists . Meeting Planners/AMCs Decision Makers . Tour wholesalers . Professional Congress/Exhibition Organizers . Travel agents . Associations and corporates

. Business and personal expenditure, amounting to 2- . Personal expenditure, on leisure activity, shopping etc. Expenditure 3 times that of a leisure visitor

. Tour operators/travel agents . PCOs / DMCs / EMCs Service Providers . Hotels . Vlasnici prostora (prostora za skupove i priredbe) . Airlines . Kongresni centri

. Bidding for international conventions/ exhibitions . Broadcast marketing to end consumers (tourists) Marketing Approach . Lobbying with government and trade bodies . Tour packages through tour operators/travel agents . Direct selling to corporates and associations

Figure 1. Leisure Tourism vs. MICE Source: http://cf.cdn.unwto.org/sites/all/files/pdf/session_2_bruce_redor_quality_in_meetings_industry_tourism_france.pdf significant difference is in market approach between countries are interested in development of this tourism leisure and business tourism: leisure tourism is charac- product. Firstly, they are expecting a good financial re- terised by promotional efforts directed towards end consult, significant profit for the local economy. However, sumers (tourists) and selling of tourism arrangements MICE industry is much more. Based on the experience through tour operators (organizers of travel packages) or of developed MICE destinations, which are at the same travel agents. On the other hand, MICE industry includes time developed economies, it can be said that the well- joint lobbying of the public and private sectors, prepara- thought strategy of MICE industry development, jointly tion of bids and direct sell to associations and corpora- defined by the public and private stakeholders, had a tions. Business events have direct microeconomic effects: strong effect on the overall economic development of increasing employment, directly generated revenues, as these countries. Through a strategically conceived lob- well as tax revenues for the public sector. bying, public sector and all relevant MICE stakeholders In order to become successful, a destination needs target business events and conferences from those sec- to be strategically oriented towards the development of tors which have been identified as important for future MICE products, to coordinate all key stakeholders from development of the economy of these countries, in both the public and private sectors, to constantly improve association and corporate markets. congress and general infrastructure, as well as to imple- MICE industry is important because it represents ment the appropriate system of destination governance an excellent basis for the so-called “invisible export” and management. Boundaries of MICE destinations do knowledge, technology, expertise and a platform for not necessarily coincide with the boundaries of destina- “knowledge-based society”. The organization of busi- tions in terms of leisure tourism. Also, MICE destina- ness events and conferences is an opportunity for the tions in the broader sense can refer not only to a city or local companies, professional associations, scientists and town, but also to the resort, district, region, and ulti- experts to come in contact with the companies that are mately the country. MICE destination is not exclusively leaders in certain branch or leading experts in a par- related to the urban area. Bearing in mind the fact that ticular field in the world to expand their network of MICE guests (business traveller, delegate), according to contacts and, finally, to establish business or scientific the estimates, daily spend on average 556 USD within a cooperation that will contribute to economic and social destination (according to ICCA on a world scale), which development. The organization of such events is a pow- includes hotel accommodation and all expenditures out- erful lever in branding countries in business, academic, side the hotel, which is at least three times more than the scientific and professional circles. On the other hand, consumption of “ordinary” tourists, it is clear why many momentum to the development of the MICE industry 77 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

runs the whole spiral of investment activities, of which defined quality standards, both on the supply and the the most visible are investments in the hotel industry demand side. Quality standards are usually defined by (hospitality industry). Consequently, we can talk about the global MICE industry associations. In their defini- an increasing number of employees in tourism sector, tion, a consensus between the leading players is crucial increasing number of arrivals and overnights, increas- because only the standards defined “inside” should en- ing tourism inflow, increasing level of total consump- able sustainable development for the industry, but at tion etc. In this regard, it is of great importance to es- the same time, they should be defined flexibly in order tablish the management structure in the entire MICE to be eligible for diversified MICE industry (organ- destination that will have the capacity to coordinate all izers of events of different sizes, different number of stakeholders, since that is a precondition for successful participants etc.) and focused on measurable results. development of MICE destination and achievement of The standards are usually related to the definition of the planned objectives. This role, having in mind ex- the quality required for determination of the meet- periences of already developed MICE destinations, is ing venue, technological equipment, accommodation, given to the convention bureau, whose task is coordi- transport connections, the quality of the place/destina- nation of activities, but also coordination of interests of tion, environmental issues, training and education of all stakeholders from the public and private sectors on personnel, professional materials etc. Implementation the destination. The convention bureau needs to define of standards should be on a voluntary basis. Quality and follow the implementation of the quality standards standards must include every element and every phase that will comply with the existing internationally ac- of organization. IQM represents a guarantee of a cer- cepted quality standards in the MICE industry, which tain level of quality. Convention bureau is precisely the primarily relate to both the supply side (conference in- mechanism that is acting as the coordinator in the im- frastructure, hotel, transport connections, the agency plementation of IQM at the destination. engaged in organizing the event, price range etc.) and The good examples are: Best City Global Alliance the demand side (professional associations, corporate (world’s first convention bureau association) and Thai- clients, number of delegates, the duration of the event, land Convention and Exhibition Bureau. The Best City spending per delegate etc.). After the decline in the pe- Global Alliance represents the capitals or leading cities of riod 2000-2004, the conference industry achieved the the following countries: Germany, Colombia, South Af- largest growth worldwide since 2005, but despite the mentioned growth, there are certain trends that con- rica, Denmark, UAE, Scotland, the USA, Australia, Sin- vention bureaus must take into account (UNWTO 2014; gapore, Japan and Canada. The association was founded GCB 2013; own research based on ICCA Statistics re- with the aim to advance and homogenize the quality of ports 2000-2015): shorter duration of events; a smaller services delivered to the clients, thus adding value to the number of organized events; new destinations (e.g. such competitiveness of the mentioned convention destina- as those in China, Korea etc.) are becoming increasingly tions. Those standards include training of employees, competitive to already established leaders in this area; internal/external audits of service standards, supplier the issue of safety and security is a major challenge in control process, management of client requirements, the selection process of a MICE destination as a result events promotional support, destination expertise, bid of the growing threat of terrorism in the world (Cam- assistance, convention planning, on-site event servic- piranon, 2006). ing and post–event evaluation. Thailand Convention Integrated quality management (IQM) is an inte- and Exhibition Bureau (TCEB) adopted a set of qual- gral part of the destination management (Zabkar et al., ity standards of destination management (ISO 2200: 2010) and we can say it is also one of the key success for food management system, ISO 50001: for energy factors of MICE destinations. Consumer satisfaction management system, National skills: for MICE indus- is in the focus of this system. The image of the entire try, TISI 22300: for MICE security management system, destination, consumers’ expectations (Armstrong et al., ISO 20121: for event management sustainability system, 1997), and the perceived quality of destination attrib- Thailand’ MICE hotel standards, ISO 9001: for quality utes (Cole et al., 2006) and services (Lee et al., 2000) management system). TCEB carries out the procedure create the perceived value that is the basis for consumer of certification of those subjects who voluntarily meet satisfaction, which should result in loyalty creation. In these standards, and consequently, wish to provide ser- addition to the standard characteristics of IQM in devices in the MICE industry. Due to the results TCEB veloping as well as developed MICE destinations, an achieved by implementing these standards, all countries integrated system of quality management for MICE in- of the Association of Southeast Asian Nations (ASEAN) dustry is developed. IQM involves the management of have accepted them. 78 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

The Case Study: Serbia Convention Bureau

Serbia Convention Bureau (the SCB) was established almost 10 years ago. The SCB started its first official activities during May 2007, by exhibiting at the IMEX, The Meetings Industry Tradeshow. It was formed as a sector within the National Tourism Organization of Serbia (NTOS), and is still keeping this form. The establishment of SCB was foreseen by the Strategy for Tourism Development 2005-2015, since the MICE was declared as the “quick win” product for Serbia, mainly due to the Figure 3. Number of delegates at international inherited congress infrastructure, which was (more or meetings in Serbia less) ready for international sale and promotions. It was Source: ICCA Statistics Reports 2007-2015 supported from the very beginning by the MICE industry stakeholders – congress centres, hotels and other providers that have grown together with the SCB in the last 10 years. In 2007, when the SCB was established, Serbia was ranked the 72nd on the global ranking of destinations attracting international association meetings, with 21 international association meetings held in Ser- bia. Three years later, Serbia joined the top 50 international destinations and moved to the 47th position. In 2015, Serbia reached the 43rd place in the world, and is still maintaining that position. Figure 4. Number of events by category “size of the event” Source: ICCA Statistics Reports 2007-2015

High growth rates are due to the low starting position of Serbia as a MICE destination that has undergone certain socio-economic challenges. However, low star- ing position means that there is a small number of international meetings, limited number of service providers and the lack of understanding of the importance of the MICE industry for Serbia. In such a situation, growth usually does not just happen. It has to be driven, and Figure 2. Number of international meetings in Serbia establishment of the SCB was the first reason for the Source: ICCA Statistics Reports 2007-2015 success of Serbia as a MICE destination. It brought better international promotion and proper monitoring of the market trends. The second reason for the progress The total number of meetings in 2014 more than is based on the SCB’s implementation of IQM activities. tripled, thus making Serbia one of the fastest growing The foremost activity that adds value to the total quality MICE destinations in the world. The total number of of Serbian meetings industry product is the partnership delegates at international meetings in Serbia increased relationship between the SCB and the MICE industry from 3555 in 2007 to 11926 in 2014, out of which almost stakeholders. Having in mind that the SCB is part of the 70% attended meetings in Belgrade. In 2014, Belgrade National Tourism Organization of Serbia, and therefore th rd assumed 50 position in the world and 23 in Europe not entirely eligible for the membership-based coopera- with 50 international meetings (business events). There tion with the industry, the partnership model has been are two internal, destination-related reasons for this in- implemented. One of the most important rules that tensive growth, besides external factors not under the the SCB follows is the “golden rule” of treating equally destination control. all industry partners. According to the SCB’s web site 79 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

(www.scb.travel), there are 73 industry partners clas- not just those of increased spending, overnights and col- sified into congress centres, hotels, agencies and other lected taxes. Those wider values are gathered around the providers. Industry is influencing the SCB activities idea of knowledge-based societies, promotion of knowl- through the Industry Board and Expat Advisory. These edge, expertise, science and research. Working together bodies are informal and voluntary, and their decisions with the ambassadors on bringing international events, are not binding but rather advisory. However, they are the SCB is setting up a platform for promotion of do- of crucial importance. mestic know-how and expertise to the world, bringing Through partnership agreements, the SCB has man- international knowledge and expertise to Serbia, and aged to increase total capacities offered to international creating opportunity for Serbia to be internationally clients, since the SCB started to coordinate all activities recognised as the centre of excellence in the certain field. and marketing focused on foreign clients. Before the es- All of the mentioned activities need to be supported tablishment of the SCB, all sales and marketing activities by sufficient resources – financial, human and know- on the MICE industry market were limited to individual how. At the moment, only 3 employees are working efforts. The partnership has been used as a joint plat- in the SCB, which represents 10% of all employees form for better and more effective sales-oriented com- in NTOS. The budget of the SCB is 5-7% of NTOS’s munication directly towards international clients. In budget. Having in mind what the SCB and Serbia have order to sustain the growth of the MICE tourism, the achieved in the field of MICE tourism, the implemented SCB needed to implement additional measures of IQM. quality management steps can be recognized as one of That is why the SCB initiated the process of industry the key success factors. According to the analysis of the standardization. This process allows partners from the activities of the SCB in 2015, 80% of the annual budget industry to build-up their capacities according to the was used to cover the costs of organization of two major standards recommended by the international associa- trade shows (IMEX, IBTM). The remaining 20% is in- tions such as International Congress and Convention vested in the following undertakings: site inspection, fa- Association (ICCA), Meetings Professionals Interna- miliarization tours and bidding for international events. tionals (MPI), International Association of Professional Therefore, it is important to understand that the limited Congress Organizers (IAPCO) and Convention Indus- resources are effectively and strategically used, resulting try Council (CIC). It was initiated at the beginning of in direct MICE business volume of over 2.5 million euro 2016, and the full implementation is expected by the end for Serbia. of 2017. One of the most important aspects is to make Also, having in mind the standards defined by the clear differentiation between travel intermediaries (they Best Cities Alliance, the Serbia Convention Bureau has are all still registered as travel agencies): destination the following standards fulfilled: 1) staff training: alt- management companies (DMC), professional congress hough there are three employees, and that the Bureau organizer (PCO), event management company (EMC) suffered employee generation change, we can say that and the travel agency per se (that was regulated by the all employees have necessary knowledge and are in- amendments to the Tourism Law, October 2015). This volved in the industry hands-on trainings; 2) supplier clarification will also help the clients to understand the control process: although meetings product is not totally scope of the work of the chosen agency, and will help under control of any the SCB or DMO in the world, agencies to specialize themselves. Furthermore, the ho- Serbia Convention Bureau is working hard on supply tels will be classified into congress hotels, hotels with side coordination, and this is done through industry congress capacities and additional hotels. The standards board meetings, annual meetings of the industry, and will also be coordinated with the ministry in charge of through regular 1-on-1 meetings with service providers. tourism, since there is the need to make the MICE tour- The principal idea is to coordinate sales and marketing ism and industry more visible among the government efforts, so that the image consistency can be achieved; decision makers. 3) management of client requirements: the SCB is deal- The final step of the IQM implementation by the ing with this activity daily, through responding to client SCB in Serbia is related to developing better visibility requirements, but also through proactive search of new of the SCB and Serbian MICE industry. For this reason, prospective leads and clients; 4) promotional support to the SCB has initiated the Ambassador program – the events: the SCB provides support to local associations initiative that gathers all influential academicians, pro- and local corporations in promotion of their interna- fessors, scientists, and professionals in their field – in tional event in Serbia in order to maintain it, or to in- order to communicate wider values and benefits that increase the number of delegates in Serbia; 5) destination ternational congresses and events are bringing to Serbia, expertise: the SCB can be categorized as a destination 80 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS expert, having in mind the relationship with all partners, operations, leading to a greater number of international but also networking within the attractions, experiences events. The Serbia Convention Bureau should have at and others; 6) bid assistance: the SCB is the leading pro- least 5 full time employees. Externally, the biggest chal- cess of bidding for international events, and it also pro- lenge is renovation of the leading congress capacity and vides support to local PCO, congress centres and local major congress centre (The Sava Centre). It requires ur- societies in this process. Services that are currently not gent reconstruction, as well as a completely new manage- being done by the SCB are: convention planning, on-site ment system. event servicing and post – event evaluation. The reason for that are limited resources, both human and financial. REFERENCES

LIMITATIONS Armstrong, R.W., Mok, C., Go, F. M., & Chan, A. (1997). The importance of cross-cultural expectations in Most conclusions concerning Serbia’s performan- the measurement of service quality perceptions in ces are based on the International Convention and the hotel industry. International Journal of Hospi- Congress Association (ICCA) data, which relies solely tality Management, 16(2), 181-190. doi:10.1016/ on the figures related to the events organised by inter- S0278-4319(97)00004-2 national associations. This means that only a portion Barković, D. (2011). Uvod u operacijski management. of the MICE industry volume is captured. There are Osijek: Ekonomski fakultet u Osijeku. several reasons for this; the most important is that a Buhalis, D. (2000). Marketing the competitive destination number of corporate, government and other forms of of the future. Tourism Management, 21(1), 97-116. meetings are not publicly reported. doi:10.1016/S0261-5177(99)00095-3 Campiranon, K. (2006). Understanding crisis vulnerabil- CONCLUSION ity of the MICE sector: A case study of Thailand. In Global Events Congress (pp. 58-65). Integrated quality management has a broader context Cochrane, J. (2010). The sphere of tourism resilience. than “product and service quality”, and it brings a com- Tourism Recreation Research, 35(2), 173-185. prehensive set of benefits to the destination, businesses Cole, S.T., & Illum, S. F. (2006). Examining the mediat- and the local community. IQM is vital for the success ing role of festival visitors’ satisfaction in the rela- of one tourism destination in modern tourism market. tionship between service quality and behavioural This is especially important for tourism destinations that intentions. Journal of Vacation Marketing, 12(2), are at developmental stage, as is the case with Serbia. 160-173. doi:10.1177/1356766706062156, p. Bearing in mind the benefits and importance of MICE European Commission. (2000). Towards quality urban tourism for destinations, systematic approach to qual- tourism: Integrated Quality Management (IQM) of ity destination management is an imperative. The Serbia Urban Destinations. Retrieved August 30, 2016 from Convention Bureau can be classified as the successful http://ec.europa.eu/DocsRoom/documents/3634/ MICE tourism related destination management organi- attachments/1/translations/en/.../pdf zation on a national level. A successful DMO in MICE German Convention Bureau. (2013). Meetings and Con- sector needs to follow and implement quality standards ventions 2030: A Study of Megatrends Shaping Our suggested by industry associations. As shown in the Ser- Industry. Retrieved August 28, 2016 from bia case study, the standards of successful convention http://www.imexexhibitions.com/media/350647/ bureau include: employee capacity building, supplier GCB-Zukunftsstudie2013_Zusammenf_E_LAY5.pdf cooperation, client relationship management, congress Government of Serbia Strategies. (2006). Strategy for promotional support and bidding process. Product de- Tourism Development of the Republic of Serbia velopment is a key ingredient for all these standards. The 2005-2015. Retrieved August 29, 2016 from http:// current level of the SCB’s activities is on the maximum www.gs.gov.rs/english/strategije-vs.html having in mind the human and financial limitations. For International Congress and Convention Association further development of Serbia as a MICE destination, (2015). Statistics Reports 2000-2015. Retrieved Au- certain challenges need to be tackled internally. First, gust 28, 2016 from www.iccaworld.com/dcps/doc. investment in the promotion of Serbia as a MICE des- cfm?docid=1789 tination is relatively low (only 5-7% of entire tourism Lee, H., Lee, Y., & Yoo, D. (2000). The Determinants of promotion budget). For better results, the MICE budget Perceived Service Quality and Its Relationship with should not be smaller than 12-15%. Secondly, increas- Satisfaction. Journal of Services Marketing, 14(3), ing the number of employees would increase the level of 217-231. doi:10.1108/08876040010327220 81 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Middleton, V.T.C., & Clarke, J. R., (2001). Marketing in Unković, S., & Zečević, B. (2016). Ekonomika turizma. Travel and Tourism. Oxford: Butterworth Heine- Beograd: Ekonomski fakultet. mann. UNWTO. (2007). A Practical Guide to Tourism Destina- Paskova, M., & Zelenka, J. (2002). Výkladový slovník ces- tion Management. Madrid: UNWTO. tovního ruchu. Prague: MMR. p. 448. UNWTO. (2014). Global Report on the Meetings Industry. Petković, G., Lovreta, S., Pindžo, R., & Pešić, S. (2016).Eva- Retrieved August 21, 2016 from luating the Concentration in Serbian Tourism and http://www.imexexhibitions.com/media/350548/ FMCG Retail Sector. Ekonomika preduzeća, 64(1-2), UNWTO_meetingsindustry_am_report%20(2).pdf 187- 198. UNWTO. (2016a). World Tourism Barometer. Retrieved Petković, G., Lovreta, S., & Pindžo, R. (2015). New Stra- August 22, 2016 from http://cf.cdn.unwto.org/sites/ tegic Cycle in the Serbian Trade and Tourism De- all/files/pdf/unwto_barom16_04_july_excerpt_.pdf velopment. Ekonomika preduzeća,.115-130. Vajčnerová, J., & Ryglová, Š.K. (2012). Using the Princi- Petković, G., & Pindžo R. (2012). Tourism and New pal Component Analysis for Evaluating the Quality Economic Challenges. Ekonomika preduzeća, p. of a Tourist Destination. Acta Universitatis Agricul- 117-126. turae et Sivilculturae Mendelianae Brunensis, 59(2), Redor, B. (2016). IQM for MICE Destinations: A Key to 449-458. Success, a presentation from the UNWTO Internati- Zabkar, V., Makovec Barencic., M., & Dmitrovic, T. onal Conference on Integrated Quality Management (2010). Modelling perceived quality, visitor satis- in Tourism Destinations: A Key to Competitiveness. faction and behavioural intentions at the destina- Retrieved August 29, 2016 from http://cf.cdn.unwto. tion level. Tourism Management, 31(4), 537-546. org/sites/all/files/pdf/session_2_bruce_redor_qua- doi: 10.1016/j.tourman.2009.06.005 lity_in_meetings_industry_tourism_france.pdf Terzibasoglu, E. (2016). Summary/Conclusions from the UNWTO International Conference on Integrated Quality Management in Tourism Destinations: A Key to Competitiveness. Retrieved September 2, http://cf.cdn.unwto.org/sites/all/files/pdf/techni- cal_conclusions.pdf

82 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Quality in Tourism and Hospitality

Can we rely on Internet distribution systems’ rating? A case study of Booking.com and HRS.com

Slobodan Čerović, Abstract: Internet distribution systems have reshaped the tourism industry, and guests’ Miroslav Knežević, ratings and reviews have greatly contributed to that. Numerous research has Dušan Borovčanin, pointed out to the importance of guest reviews and hotel ratings for the Internet distribution systems. However, the question remains as to how much we can Vladimir Džamić rely on different Internet distribution systems (IDS). This paper demonstrates a statistically significant difference in ratings on different IDS for 10 evaluated Singidunum University, hotels. What could be the reason for this? The authors believe that the number Belgrade, Serbia of criteria evaluated by the guests and the differences in criteria evaluated reflect different hotel ratings on IDS. This, of course, as previous researchers have demonstrated, can affect the overall hotel performance, thus resulting in fewer reservations and unfavourable financial results.

Keywords: hotel, guests, reviews, IDS, OTA’s, Internet.

Introduction

Travel industry has experienced huge transformations, mainly triggered by rapid technological advancements. (Poon, 1993; Sheldon, 1997). Yet, these changes are never-ending and occur almost every day on a global scale. However, if we decide to single out the most important change in the tourism and hospitality field, it would definitely be the introduction of the Internet distribution channels, as suggested by some authors (Kang et al., 2013). At the moment, they are taking control over individual reservations, mainly due to their emphasis on providing the best available rate. This best available rate, however, pushed the hotels into a stronger competition on the market, almost threatening to take control over the room pricing from hoteliers to IDS. Many authors, like Carrol and Siguaw, have dealt with the ways in which IDS changed the travel industry (Carroll & Siguaw, 2003). Others attempted to determine the level to which the hotels became dependent on IDS, while some went even further and explored the correlation between the hotel rating and guest comments and their effects on profitability (Ye et al., 2009). Nonetheless, little has been said on the Correspondence: significant difference between guest behavior concerning different IDS. If Dušan Borovčanin we already know how important guest ratings are, then the difference in e-mail: their rating on several IDS can consequently affect the overall hotel perfor- [email protected] mances. Furthermore, the market pressure and competition have triggered 83 Sitcon 2016 Doi: 10.15308/Sitcon-2016-83-86 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

hotel managers to promote their hotels on many differ- IDS in modern business. This certainly implies a well- ent IDS channels so as to attract new customers. This planned and managed online reputation, which could could result in the failure of hotel managers to devote also be handled with modern ICT, as our previous study exactly the same attention to hotel presentation on every has shown (Čerović et al., 2016). single IDS. Finally, lower rating on some IDS compared to others could lead to lower marks and consequently, Why guests rate same hotels differently: lower profitability. A case study of booking.com and hrs.com

The importance of internet The paper has already elaborated on the importance distribution systems of guests’ reviews for hotels and their performances. Simply put, they are so important for hotels, especially Almost exponential growth of Internet applicati- because they are very much important for their custom- ons in hospitality and tourism resulted in an incredible ers, since they affect customers’ intentions while making amount of user-generated reviews on different internet a decision on where to stay. At the end of the 20th and sites and distribution channels (Ye et al., 2009). Further- the beginning of the 21st century, several hotel book- more, a study from Google and Ipsos MediaCT showed ing websites were created, and they slowly emerged into that over 70% of respondents usually start doing rese- multinational corporations. They have grown so quickly arch on-line before they make a decision on how and that recently many hotel managers felt they are losing where to travel (Ipsos MediaCT, 2013). Not only that control over their own pricing. As Zach Zahran from they search online, but as Anderson clearly demonstra- Kitano Hotel New York says: “Online travel agencies ted, the number of people consulting reviews prior to drive 20 to 25% of hotel bookings industry-wide, but booking has steadily increased over time, as well as the at a heavy cost of 15 to 25% commission fees”1,2. As re- number of reviews read (Anderson, 2012). In line with gards IDSs, market leader at the moment is a Priceline this, business intentions to invest in their online reputa- group, with one of their well-known brands Booking. tion are also rapidly increasing (Tripadvisor, 2015).This com (Group, 2016). However, there are many different seems logical if we consider the fact that online reviews IDS, which usually differ by the market segment they influence over $10 billion a year in online travel purcha- are created for. However, they do not vary considerably ses (Vermeulen & Seegers, 2009). Several authors have in terms of the number of accommodations they are already shown how reviews improve hotel (brand) sali- providing. Other well-known IDSs are Expedia, HRS, ence in consumers, and thus improve a chance of hotels’ Hotels.com, Agoda etc. inclusion in consumers’ awareness sets (Alba & Chatto- The starting point in this research was to test wheth- padhy, 1986; Vermeulen & Seegers, 2009). The group of er there is a difference on how guests rate one hotel on authors correctly argue that online customer reviews as different IDS, and if so, whether it is the case that on a particular form of eWOM have become the most im- particular IDS, the rate is always higher or lower. We portant information source in customers’ decision-making took two very popular IDS – Booking.com offering (Phillips et al., 2016), and that they‘’inarguably, rely more slightly over 1 million places to stay (Booking, 2016) on online search strategies’’(Sparks & Browning, 2013). and HRS.com that offers over 700.000 hotels and holi- However, it should be noted that eWoM significantly day homes and apartments (HRS, 2016).We tested 10 differs from traditional WoM. Accordingly, we shall sin- hotels from 2 European capitals, and over 42,237 rates gle out one such difference, as most relevant for this pa- for the period August 2013-August 2016. We used IBM per, which says that in traditional WoM, the consumer SPSS version 20.0 and tried to determine whether there receives a very modest number of reviews (Zeithaml et is a statistically significant difference between the ratings al., 2006; Xie et al., 2010), whilst in eWoM, the con- on two IDS tested via paired sample T-test. The results sumer may encounter a dozen reviews from customers obtained are presented below. with very diverse backgrounds (Gretzel & Yoo, 2008). Furthermore, the occurrence of recent positive reviews 1 See more at: http://hotelmarketing.com/index.php/content/ can over-ride or moderate the effect of a set of nega- article/hotel_websites_might_just_have_the_best_rates_and_ perks#sthash.2n9iyuRR.dpuf tive reviews, in respect of booking intentions (Sparks & 2 Many people use the term OTAs (Online travel agencies) Browning, 2013) while the hotel can increase its prices while referring to websites like Booking.com and Expedia. by 11.2% and maintain the same occupancy if it increas- com. There are several more terms which are in use such as es its rating for 1 point on a 5-point scale (Anderson, ADS (Alternative distribution channel) and IDS referring to Internet distribution systems. We decided to use IDS for this 2012). Therefrom comes the enormous importance of paper as we consider it most convenient. 84 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Table 1. Paired sample statistics differences. On the other hand, a chance is that the front Paired Samples Test office managers, who usually take care of hotel presen- Paired Differences tation on IDS, simply do not have enough time to pay Mean Std. De- Std. 95% exactly the same attention to every IDS where their ho- viation Error Confidence tel is present. Therefore, they focus on 2-3 major IDS, Mean Interval of the Difference replying to guests’ comments quicker, motivating them Lower with further discounts if they leave good marks etc. This Pair Booking.com would require an additional survey for front office man- ,4790000 ,4620354 ,1461084 ,1484798 1 - HRS agers, which goes beyond the scope of this paper. Never- theless, we do not exclude this scenario, even though we The Sig (2-tailed) from Table 2 often referred as p consider it a secondary reason for the results obtained. value, clearly shows that there is a statistically significant However, we primarily argue that the number of criteria difference in how guests rate the same hotel on Booking. these two IDS use might be the reason for a significant difference in ratings. In addition, we believe that the com and on HRS. Moreover, the results obtained in the more specific criteria, the higher the chance of having research show that the guests rate hotels lower on HRS a lower mark. Thus, we compared how many criteria rather than on Booking.com. each of these IDS evaluates and how many of them are overlapping. The results are presented in Fig. 1. Table 2. Paired samples t-test It is clearly visible that HRS.com offers 12 criteria to Paired Samples Test its customers, while Booking.com offers 6. Surprisingly Paired t df Sig. enough, however, only 2 criteria are found to be over- Differences (2-tailed) 95% lapping, namely “Value for money” and “Friendliness Confidence Interval of the and competence of hotel staff”. From our perspective, Difference HRS goes into detail when trying to achieve room quali- Upper ty. They have 4 criteria related to it (beds comfortability, Pair Booking.com ,8095202 3,278 9 ,010 room facilities, room size, bathroom), while Booking. 1 - HRS com simply brings it together in one, naming it “comfort”. Therefore, the overall rating given to the hotel is There are several possible reasons for such different composed of 12 components in case of HRS, whilst in marks. It must be said that we didn’t test the difference case of Booking.com, it consisted of 6. It might also be in marks of the guest coming from different countries, argued which IDS offers more relevant criteria for the which could be one of the reasons. Hypothetically, the guests, but that question is not the subject of this paper, guests from Germany cloud prefer to book their stay even though it represents an important issue. What we through HRS, and they might usually leave lower marks found interesting during our research is that Booking. when they travel. However, since both IDS operate glob- com is the only IDS that offers Wi-Fi as the criteria, ally, we thought that the sample size will neutralize these which the authors consider a very good thing, having in

Figure 1. Difference in IDS criteria 85 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

mind an increasing number of millennials taking part in Booking. (2016). Booking.com. Retrieved September 16, international tourism. 2016 from http://www.booking.com/ Nevertheless, the reasons for different ratings should Carroll, B., & Siguaw, J. (2003). The Evolution of Hotel Distribution: Effects on Hotels and Intermediaries. be the subject of further work. It should be tested on a Cornell Hotel and Restaurant Administration Quar- larger sample of hotels with different IDS, but the herein terly, 38-50. presented study could be the good starting point. Čerović, S., Knežević , M., & Borovčanin, D. (2016). The role of information and communication technology Conclusion in guest satisfaction analysis. Ict in tourism & hospitality (pp. 582-588). Belgrade: Singidunum Uni- IDS have an indisputable role in international tour- versity. ism. Hotels are becoming more and more dependent on Gretzel, U., & Yoo, K. (2008). Use and impact of online them, and are thus switching their investments tremen- travel reviews. In P. O’Connor, W. Hopken, & U. dously to on-line reputation. The eWoM phenomenon Gretzel, Information and Communication Technolo- gies in Tourism. New York: Springer. could also be observed in the hospitality sector. Con- versely, guests’ reviews and ratings on IDS have become Priceline Group. (2016). Priceline Group. Retrieved Sep- tember 16, 2016 from http://www.pricelinegroup. so important that they significantly affect the overall ho- com/about/history/ tel profitability. Therefore, the purpose of this paper was HRS. (2016). HRS at a glance. Retrieved September 16, to determine whether the guests rate hotels differently 2016 from http://www.hrs.com/web3/showC- on two IDS compared. msPage.do?clientId=ZW5fX05FWFQ-&cid=51- The results obtained indicate a significant difference 2&pageId=standard-01841 in hotel ratings between Booking.com and HRS.com. It Kang, B., Brewer, K.P., & Baloglu, S. (2013). Profitabil- is notable as well that the average rating point on HRS ity and Survivability of Hotel Distribution. Journal is usually lower than on Booking.com. Even though this of Travel & Tourism Marketing, 22(2007), 37-50. doi:10.1300/J073v22n01_03 wasn’t an empirical study and that several scenarios co- Phillips, P., Barnes, S., Zigan, K., & Schegg, R. (2016). uld be the reason for this case, we argue that the number Understanding the Impact of Online Reviews on of criteria affect the overall ratings in a way that more Hotel Performance: An Empirical Analysis. Journal criteria results in a lower rating for a particular hotel on of Travel Research. doi:10.1177/0047287516636481 two IDS tested. In addition, the more specific criteria, Poon, A. (1993). Tourism, technology and competitive the lower the hotel rating. This is argued due to the table strategies. Oxford: CAB International. presented in the study, where it is clearly visible that Sheldon, P. (1997). Tourism Information Technology. Ox- HRS offers twice as more criteria than Booking.com. ford: CAB International. Moreover, they (HRS) go into detail by asking questi- Sparks, B., & Browning, V. (2013). The impact of online ons to their customers offering 4 criteria compared to reviews on hotel booking intentions and perception 1 given by Booking regarding the room comfort. We of trust. Tourism Management, 32(6), 1310-1323. consider this particular question a very important one. doi:10.1016/j.tourman.2010.12.011 As demonstrated in previous studies on the importance Tripadvisor. (2015). Tripbarometer: Global Travel Econo- of guests’ ratings and reviews, and how they can affect my Report. TripAdvisor. the hotel profitability, it is very important for hotel ma- Vermeulen, I., & Seegers, D. (2009). Tried and tested: The nagers to understand what could be the reason for diffe- impact of online hotel reviews. Tourism Management, 30(1), 123-127. doi:10.1016/j.tourman.2008.04.008 rent ratings on various IDS for their hotel. Identifying Xie, H., Miao , L., Kuo, P.J., & Lee, B.Y. (2010). Consum- what might have caused that could be the starting point ers’ responses to ambivalent online hotel reviews: in maintaining an equal rating on various IDS. The role of perceived source credibility and pre- decisional disposition. International Journal of Hos- References pitality Management, 30(1), 178-183. doi:10.1016/j. ijhm.2010.04.008 Ye, Q., Law, R., & Gu, B. (2009). The impact of online user Alba, J., & Chattopadhy, A. (1986). Salience Effects in reviews on hotel room sales. International Journal of Brand Recall. Journal of Marketing Research, 23(4), Hospitality Management, 28(1), 180-182. doi:10.1016/j. 363-369. doi:10.2307/3151812 ijhm.2008.06.011 Anderson, C. (2012). The Impact of Social Media on Zeithaml, V., Bitner, J., & Gremler, D. (2006). Services Lodging Performance. Cornell Hospitality Report, marketing: Integrating Customer Focus Across the 12(15), 6-11. Firm. Boston: McGraw-Hill.

86 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Quality in Tourism and Hospitality

Social CRM in the airline industry

Jelena Gajić, Abstract: The process of including the so called “digital” users who regularly express Radmila Živković, their attitudes and needs via social networks poses a huge challenge to modern Jelena Stanković, airline companies. Given that the implementation of technological innovations enables identifying, developing and retaining high-end travelers, this Ivana Brdar paper deals with the analysis of benefits of business concepts proposed by airline companies based on high-technologies, primarily Social CRM (Social Singidunum University, Customer Relationship Management - SCRM). The use of social media has Belgrade, Serbia altered the users’ expectations, and enabled airline companies to more rapidly adapt to changeable expectations of travelers. The results indicate that the attitudes and comments of users, based on the use of SCRM on the Internet and social networks, have become instantly available to vast number of new users, thus forming the chain reaction that can have immediate positive or adverse effects on future business performances and positioning of airline companies in the market.

Keywords: airline companies, profitable travellers, social CRM, Internet, loyalty.

Introduction

Modern information-communication technologies (ICT) have altered the principles of doing business and provided new and ground-breaking instruments that would enhance the global competitiveness (Tussyadiah & Pesonen, 2016, p. 1). The attractiveness of digital space and virtual communication has posed significant challenges to the services sector, in particular tourism industry (Mastorakis et al., 2015; Živković et al., 2015). Contemporary tourists have at their disposal abundance of information on destinations, hotels, airline companies, prices, reservations, guest posts and reviews, and can instantly choose, purchase, travel, leave comments and gain unique travel experiences. Along with the latest technologies, new marketing trends have brought about numerous changes in the airline industry, by filling in the communication gaps using new methods of customer satisfaction measurement, collection of guest complaints and comments, provision of innovation etc. Marketing strategies are enriched with the new instruments for communication with service users, as well Correspondence: as suppliers, partners, employees (Mastorakis et al., 2015; Živković et al., Ivana Brdar 2015). Accordingly, the new area of Social Media Marketing has emerged, e-mail: which manages the fast and multifaceted process of information trans- [email protected] mission in various directions and towards different target groups, bearing 87 Sitcon 2016 Doi: 10.15308/Sitcon-2016-87-91 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

in mind that the same message can have various mean- oping countries are gradually starting to implement ings and leave quite different impressions, i.e. initiate the global communication trends, and thus are able to diverse experiences. overcome such issues. The aim of the paper is to highlight the importance ICT provide tactical instruments for CRM develop- of Social CRM for airline companies, which use it to ment in the airline industry, and their aim is primar- successfully upgrade the experiences of their travelers ily to retain the most valuable customers. To that end, through new ideas, efficient solutions in the services sec- eCRM (Electronic Customer Relationship Management) tor and high-quality services. and web technologies are used as a competitive business strategy to generate interactive relationships between Social CRM in the airline industry airline companies and service users throughout all stages of the purchasing process (Milović, 2012, p. 25; Neises, Information-communication technologies (ICT) 2013, p. 8; Mastorakis et al., 2015). have enabled airline companies to develop new strategic relationships with service users and establish the Airline companies invest enormous efforts into im- system that maintains long-term relationships, also plementing the new systems that would ensure long- known as CRM. Given that customer loyalty has be- term customer loyalty, in particular those in the digital come more important for increasing the market share world. One such system is Social CRM, which implies and profitability (Neises, 2013, p. 7), airline companies that the company is capable of cooperating with ser- seek to redirect the use of ICT in the area of electronic vice users relying on their needs and wishes, and not and digital communications (Mangold & Faulds, 2009, on its own rules and principles (Chess Media Group, p. 357; Mastorakis et al., 2015). This leads to the reduc- 2010, p. 3). Social CRM implies active cooperation tion of business costs, time optimization for performing of all employees in the company and involvement in the anticipated business activities, increasing employee customer services, implementation of pull communi- efficiency, developing programmes for attracting po- cation strategy with customers, 24/7 Internet access, tential travelers, personalization of services, and spe- use of various media for transmission of comments cial loyalty programmes (Russo, 2011), with particular and complaints of users, as well as involvement of us- emphasis on providing more accessible services, and ers in generating ideas to upgrade the overall quality of faster flow and exchange of information. Besides nu- services Neises, 2013, p. 20; Biederman, 2008; Chaffey merous advantages, this system has certain drawbacks et al., 2006). Digital users born after the year 1980 are that are mostly reflected in the security of e-payment of particularly relevant, as they mostly communicate via services, and credibility of the comments published on social networks (Mangold & Faulds, 2009). They use the the web sites and social networks (Kekec & Atay, 2012, new social CRM to rapidly spread their opinions, which p. 185). The developed countries have found more ef- guarantees more intensive cooperation with the airline ficient methods to protect their users, while the devel- companies (Neises, 2013).

Figure 1. Proces Social CRM Source: http://www.slideshare.net/fred.zimny/chess-media-group-guide-to-social-crm-2010 88 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

SCRM process (see Figure 1) starts by collecting the Airline companies are introducing various innova- comments and complaints of users, as well as creative tive activities, such as gaming, customer participation in employee ideas. This information serves as a basis for creating services and co-creation of tourist experience, defining and selecting target groups and defining goals. so as to build long-term relationships with service users The following step is to establish the so-called “commu- (Xu et al., 2015). nity CRM employee teams”, which deal with marketing In order to surprise and motivate their travelers, activities, communication with users and customer ser- KLM Airlines awarded personalized gifts to those who vice on the micro and macro level. Finally, the process were waiting at Amsterdam Schiphol airport, on the of results measurement is performed, which needs to be basis of the personal data they left on Four Square and in agreement with the predefined goals of the company. Twitter (e.g. their favorite activities and interests). The Specifically,social media activities, as well as the data on research has shown that the travelers were both sur- service users need to be incorporated into the CRM sys- prised and pleased with such gesture (Morgan et al., tem and connected with the loyalty programmes, so as to 2011). lead social customer management to business outcomes The survey of over 200 Twitter, Facebook and Ins- (Morgan et al., 2011, p. 10; Mangola & Faulds, 2009). tagram profiles of the 40 largest companies worldwide, which covered the period of three months, has shown SCRM IMPLEMENTATION that the use of eCRM and SCRM has brought about the following results to airline companies (Talkwalker, There are various examples of airline companies 2016): that use SCRM to incessantly upgrade their offer and contents with the aim to retain their customers. For in- ◆◆ KLM is an airline company that most responds stance, Emirates continuously implement new services to the requests and comments of travellers on to develop relationships with customers, such as: adds Twitter, up to 87% of requests, i.e., it delivers 118 augmented reality touch to its economy class amenity responses on average per day; kits, pre-flight and in-flight entertainment. Namely, ◆◆ Twitter accounts of low-budget companies have Dutch LCC Transavia was one of the first low-cost air- the largest number of followers on Twitter, fol- line companies to introduce WhatsApp messaging for lowed by Air Asia and Jet Blue; customer care, while Jetstar Asia introduced in-flight ◆◆ Quatar Airways has the largest number of Face- book exchange to encourage holiday reading. book fans;

Figure 2. An example of a post on Instagram by “ambassadors” Emirates airlines Source: http://blog.talkwalker.com/en/top-40-airlines-social-media/ 89 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

◆◆ Emirates and American Airlines are the most represent an important source for developing an effec- popular and widespread on Instagram. tive marketing and purchasing strategy to enhance the Middle East airlines, including Quatar Airways, Emi- overall customer experience. rates and Etihad, are also involved in the activities of ge- Modern airline companies wish to differentiate their nerating posts of their travelers on the Internet. The re- CRM programmes in a more efficient way, which im- sults for the year 2015 show that Emirates and American plies devoting special attention to market segmentation. Airlines are the most dominant on Instagram, i.e., Emi- Value-based segmentation is of particular relevance for rates are most often mentioned on Instagram worldwide, modern airline companies, as it helps understanding in Europe and Asia (Figure 2). the profitability of each user. The airline companies can The airlines Emirates has developed one of the most use this criterion to determine which travelers to retain, efficient SCRM strategies based on the principle that the as well as how to make less valuable travellers more val- so called Instagram “ambassadors” of this airline com- uable and loyal. Research has shown that SCRM con- pany are actually its travelers who are active on Insta- cept implementation by airline companies can contrib- gram, and the images of the company. ute to better management of business activities (Route Continuous monitoring and analysis of social net- and schedule planning and profitability), as well as the work benefits can provide the companies with the an- activities related to yield management. swers related to the efficiency of their SCRM strategies. We should bear in mind that everything that goes on the References Internet, stays on the Internet. Thus, the results achieved Biederman, P. S. (2008). Travel and tourism : an industry by airline companies through implementation of their primer. Upper Saddle River, NJ: Pearson/Prentice strategies via social media are of vital importance. This Hall. is also supported by numerous rankings of the most Chaffey, D., Chadwick, F. E., Johnston, K., & Mayer, R., favourite and least favourite airline companies. Such (2006). Internet Marketing. Upper Saddle River, NJ: rankings are based on the attitudes on service quality Prentice Hall. posted by both satisfied and dissatisfied travelers on Chess Media Group (2010). Guide to understanding social social networks. According to one research, about 1.3 CRM. Retrived May 9, 2016 from: http://www.slide- million tweets was analyzed during the holiday season share.net/fred.zimny/chess-media-group-guide-to- for 70 world airline companies, so as to determine posi- social-crm-2010 tive or negative feelings/experiences of travelers (Stra- Xu, F., Tian, F., Buhalis,D., Weber, J., & Zhang, H., (2016). tos Jet Charters, 2016). Given that all business organi- Tourists as Mobile Gamers: Gamification for Tour- zations implement digital technologies and benefits of ism Marketing. Journal of Travel & Tourism Market- social networks, airline companies use Social Media ing, 33(2016). doi:10.1080/10548408.2015.1093999 Marketing to “monitor” their target groups. Numer- Kekec M.D., & Atay L. (2012). Electronic marketing prac- ous research has shown that social networks contribute tices at hotels in Turkey and a survey with four and five star hotels. An International Multidisciplinary considerably to more quality experiences of users with Journal of Tourism, 7(2), 183-201. services and the company. Moreover, social networks Mangold, W.G., & Faulds,D.J. (2009). Social media: The strengthen the company’s brands and enable users to new hybrid element of the promotion mix. Business express their opinion, measure their satisfaction, i.e. dis- Horizons, 52, 357-365 satisfaction, in a fast and efficient manner. A lot of re- Mastorakis,G., Trihas, N., Perakakis, E., & Kopanakis, I., cent studies, whose results serve for strengthening social (2015) E-CRM in tourism exploiting emerging infor- media strategies, deal primarily with “linking brands” mation and communication technologies, Anatolia. and digital users. An International Journal of Tourism and Hospitality Research, 26(1), 32-44. doi:10.1080/13032917.2014 Conclusion .902767 Milović, B. (2012). Social Media and eCRM as a Prereq- uisite for Hotel Success. Management Information The potential of social media and networking is used Systems, 7(3), 26-31. as a vital part of all marketing activities in the airline in- Morgan, J., Chan, C., & Mackenzie, J. (2011). An In- dustry. Social media, live chats, customer communities, troduction to Social CRM for the Travel Industry. email messages and mobile applications are just some Retrived May 8, 2016 from http://www.veilleinfo- of the communication channels that provide valuable tourisme.fr/medias/fichier/introduction-to-social- and legitimate information on service users. These data crm-for-travel_1334763359868.pdf 90 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Neises, L. (2013). Social CRM in the Airline Industry: En- Tussyadiah, I.P., & Pesonen, J., (2016). Drivers and barriers gaging the Digital Natives. Zurich: LIT. of peer-to peeraccommodation stay: An exploratory Russo, X. (2011). Top Reasons for Buying a CRM. Re- study with American and Finnish travellers. Current trieved September 9, 2016 from http://www.soft- Issues in Tourism, 1-18. doi:10.1080/13683500.2016.1 wareshortlist.com/articles/Top_reasons_for_buy- 141180 ing_CRM_software.html Živković, R., Njeguš, A., Gajić, J., Brdar, I., & Mijajlović, I. Stratos Jet Charters. (2016). Airline Tweet Support. Re- (2015). Upravljanje online zajednicama u hotelijer- trieved September 9, 2016 from https://www.stra- stvu. Singidunum International Tourism Conference tosjets.com/airline-tweet-support/ 2015 - SITCON. doi:10.15308/sitcon-2015-133-139. Talkwalker. (2016). Top 40 Airlines Social Media. Re- trived June 18, 2016 from http://blog.talkwalker. com/en/top-40-airlines-social-media/

91 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Quality in Tourism and Hospitality

Information Retrieval Evaluation for Tourism related Social Media Content

Angelina Njeguš1, Abstract: Considering that Social Media play an important role as an information source 2 Verka Jovanović , for users, many companies focus on Social Media marketing as a strategic Marina Marjanović-Jakovljević3 tool for their business. According to the recent research, more then 60% of users use search engines when looking for some information. Therefore, this study aims to investigate to which extent Social Media appear in search engine results, and what is the relevance of retrieved Social Media sites. Since the 1 Singidunum University, Faculty of goal of any Information Retrieval system is to retrieve relevant documents in Informatics and Computing response to the user’s query, the set-based measure and rank-based measures Belgrade, Serbia are used herein. Mathematically presented, these factors are very sensitive 2 Singidunum University, Faculty of to user relevance judgements and their properties are discussed. Through Tourism and Hospitality Management, conducted experiments, Precision, Recall and Average Precision of a Google Belgrade, Serbia search engine are evaluated. Different tourism related topics, in terms of IR 3 Singidunum University, Faculty of evaluation metrics, are compared. The results show that Social Media content Technical Sciences, appears in very low percentage (23.1%) of all search results. The most visible Belgrade, Serbia social media are Facebook, Wikipedia and TripAdvisor. Keywords: social media, information retrieval, search engine, tourism.

Introduction

It is well-known that Social Media (SM) is among top three Search Engine Optimization (SEO) strategies, besides content quality and backlinks (Tober et al., 2014). From the company’s perspective, it is very important that, apart from links that lead to their official web pages, also the links of their SM websites appear, so that users can raise their ratings. From user perspective, SM plays an important role as an information source (Kirchhoff et al., 2008). For example, 52% of tourists find inspiration for travelling when using SM, where 29% find travel planning ideas on Facebook, and 14% are inspired by TripAdvisor’s vacation planning insight (Mdg, 2012). However, according to the research of the European Tourism Association, SM is less effective when generating bookings in the short term (Rossini et al., 2014). On the other hand, according to Google Correspondence: Angelina Njeguš research, 61% of tourists use search engines when searching for travel related information (Google, 2014), and Social Networks, such as Google e-mail: + and Facebook, are ranked among the first. Therefore, this study aims [email protected] to investigate to which extent SM appear in search engine results when 92 Sitcon 2016 Doi: 10.15308/Sitcon-2016-92-100 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS searching for tourism related information, and what is Research Background the relevance of the results obtained. Another challenge is that Web 3.0 introduced smarter Development of dynamic websites was the trigger web based on semantic web. The idea is that data on the for switching from static Web 1.0 to a dynamic and web are not just hyperlinked, but now there is a mean- highly social Web 2.0. Soon after, websites that enable ing of their interconnections through added metadata users to communicate with each other, share pictures, and machine interpretable statements. World Wide Web videos, reviews, customize personal profiles, write blogs Consortium (W3C) introduced several standards that and other, were developed. These websites are called SM encourage webmasters to use standard data formats that websites. However, the slight revolution in people’s so- will enhance semantic web content development. The cial life has brought the advent of Social Networks. In Resource Description Framework (RDF) allows storing favour of this fact are the figures of social network users data in a standard format in order to easily identify the where it is estimated that there are around 2.13 billion meaning of data when search engine processes the user users (Statista, 2015). query. However, smarter web is not only about seman- The SM refers to a group of dynamic web-based tics but also the usage of web data mining techniques in applications where its content is mostly generated by the order to get knowledge about the user. The smarter web users, so called user-generated content (UGC) sites (Ka- is also influenced by big data that are generated on the plan et al., 2010). The current examples of SM websites web every second. Therefore, there is a need for tools that include social networking sites (e.g. Facebook, LinkedIn, will process and analyze big data. In practice, all of these Twitter), Social News, Photo Sharing (e.g. Instagram, mean, that user, through advanced search engine, can Pinterest), Video Sharing sites (e.g. YouTube), Online ask the specific question (search query) and receive al- communities, Blogs, Forums, FAQ, Commenting, Tradi- most concrete answers (relevant information). However, tional news, Virtual worlds etc. SM has a social structure a huge effort is in front of the search engines who seek to made of many connected nodes (individuals or objects), improve relevance, and importance of search results by that are composed of the concept and role in a form of understanding user intention and the contextual mean- sub-object that has various characteristics. Nodes are direct/indirect connected by specific types (such as frien- ing of user’s query (Girit et al., 2012). dship, dislike, financial exchange). The overall graph mo- Most search engines use search methods that are del of SM forms the entire network (Choi et al., 2012). not convenient for indexing and retrieval of semantic In recent studies, it has been argued that SM started markup content (Finin et al., 2005). When detecting replacing traditional information sources, and later then embedded markup within a document, search engines that SM influence the users’ online purchasing behavior index it, but not process the markup. Unfortunately, process (Vinerean et al., 2013; Ioanas et al., 2014). Since the semantic markups (such as RDF or OWL) are typi- SM has a significant impact on user’ information ac- cally used as knowledge representation languages rather quisition, much effort is done in the field of application than markup. Therefore, the most search engines today that analyse the content of Social Network and informa- cannot use semantic markup to improve information tion retrieval systems (Kirchhoff et al., 2008; Nasution retrieval. However, Google has several ongoing pro- et al., 2012; Korfiatis et al., 2008). With advancement jects and patents in the field of semantic search, such of the web, major search engines constantly introduce as: Assigning terms of interest to an entity; Self learn- new features. However, most information retrieval sys- ing semantic search engine; Knowledge graph based tems have limited abilities to give personalized response search system and other. In order to find out to what to the user request (Fernandez et al., 2011; Zidi et al., extent the information retrieval systems of today’s se- 2013). Higher-level natural language processing tech- mantic search engines are improved, in this paper, their niques such as chunking, word sense disambiguation, precision, average precision and recall of information parsing, compound recognition, part-of-speech tagging retrieval system using keywords to complete phrases of and other methods, used in information retrieval, have tourism related topics are done. recorded very slow improvements (Brants, 2003; Fer- This study is organized as follows: the first section randez et al., 2013). provides the background of the research, then the Infor- Information retrieval (IR), as part of computer sci- mation Retrieval System Model is given, and the proper- ence, studies the effective and efficient retrieval of rel- ties of evaluation metrics are discussed, and at the end evant information from a collection of web documents the experiment design and results are analyzed. in order to satisfy a user information need (Mehlitz et al., 93 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

2007; Crestani et al., 2001). There are several ongoing be consistent with the information search context, the issues such as relevance, performance, scalability, and focus of the study is on the capital city Belgrade, as an other. Relevancy from user perspective is subjective (us- urban destination. Therefore, the selected pre-defined er’s judgment), situational (depends on user’s needs), keywords are combined with destination name to form cognitive (depends on user perception), and dynamic queries, which were entered then into Google. (changes over time) (Borlund, 2003). Another problem is In order to measure IR effectiveness, there are set- the size of the Web, where it is estimated that it contains based evaluation measures (precision and recall), rank- at least 4.72 billion pages (www.worldwidewebsize.com, based measures, and other. To evaluate the performance from November, 2015). of IR system, the paper measures how far down the Evaluation of search engine systems is highly impor- ranked list of results will a user need to look to find SM tant for measuring how successfully an IR system fulfills relevant documents. The objective of the experiment is users’ information needs (Clough et al., 2013). At the to evaluate precision, average precision and recall of a beginning, this evaluation was mostly system-oriented Google search engine. i.e. conducted in a laboratory setting environment with According to the statistics, Google is the most used the main focus on search algorithms, disk space, system search engine in the world, with 1.1 billion of unique speed, and other relevant system factors, but with no monthly visitors (eBiz, 2015), and 67.5% of market share. influence or with very little involvement of end users. At the beginning of the search engine era, Google ranked Today, it is mostly user-oriented which takes into ac- pages according to the number of frequently used key- count the user’s context, interactions with the system, words. Today, the goal of semantic search created the information searching behavior, satisfaction with the set of new criteria such as the number of backlinks, user search results and others (Borlund, 2009; Maskari et signals etc. Due to this development, ranking factors are al., 2011). Therefore, more research is dealing with in- constantly evolving. According to the Google ranking- teractive information retrieval (IIR) evaluation (Kelly, factors 2014 (Tober, 2014), the social networks, such as 2009). An important role in establishing standards for Google +, and Facebook, are among the first. Howev- IIR evaluation belongs to the work of the organization er, the herein presented experiment demonstrates that of the information retrieval evaluation events - Text RE- Google does not rank, or in very low percentage shows trieval Conference (TREC) Interactive Track (Figure 1). the SM as search results. IR system evaluation is usually test collection based. The test collection contains a set of statements expressed Information Retrieval System Model as keywords, questions or longer written descriptions that are related to some topic. In this paper, tourism re- System model flowchart lated topics are used. The selection of keywords is done upon a number of prevoius studies and recent trends in In this paper adjusted system model flowchart is tourism. The most searched keywords, that reflect the used (Marjanovic-Jakovljevic, 2015a) (Figure 2). On broad tourism topics, are “hotels”, “restaurants”, “well- the left side of the diagram, shown in Figure 2, a user ness”, “nightlife”, and other (Xiang et al., 2010). Recent query is presented. In this paper, tourism related topics development in tourism involve Medical tourism, Edu- are used. In that stage, the user can enter some query, cational tourism, Sports tourism and other. In order to like “Visit Belgrade” or “Book a hotel in Belgrade” etc.

Figure 1. The history of IR system studies Source: Kelly (2009). 94 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

On the other hand, web provides huge amount of e- Precision is calculated as the ratio of the number commerce market data provided by tourism companies, of relevant retrieved web documents (Nrel_ret), and the such as hotels, restaurants, online travel agencies. Search number of retrieved web documents within the rank- engine system includes both documents, and estimates ing list (Nret). In other words, precision measures the at what degree ranked web documents meet user’s in- capability of the IR system to retrieve only relevant web formation requirements. The user rates retrieved docu- documents. However, it is influenced by retrieval of ments as relevant or non-relevant. Therefore, the rel- non-relevant web documents. evance of the document is assessed according to the user Nrel _ret information need, not on query. The challenge in any IR Precision = (1) N system is to retrieve only the desired web documents, ret so various system performance criteria have been used Recall measures the ability to find all relevant web to measure the IR system effectiveness. In this paper, documents within the entire result list, which is, in the Google search engine is used for measuring the IR sys- case of web search, a time-consuming job. It is defined tem effectiveness. as:

N rel _ ret Recall = (2) N rel

Where Nrel presents the number of relevant web documents within the entire result list. Average Precision (Buckley et al., 2000) measures ranked retrieval results, with focus on returning maximum number of relevant documents that are positioned higher in the ranked list. In other words, Average Preci- sion is the mean of the Precision that is calculated after retrieval of each relevant document. If the observed document is assumed as non relevant, Precision has a value of zero. Therefore, Average Precision might be expressed as: NN 11ret ret x i AveragePrecision(i) ==åxx Precision ååi Nii==11iiNi= k (3) rel__ ret rel ret k 1

where: ì th ï1if k page link is relevant x =í (4) k ï th îï0if k page link is not relevant

Figure 2. System Model Flowchart All relevant documents that are retrieved may or may not belong to SM. To estimate the significance Search Engine evaluation metrics properties of SM marketing, the probability of SM in the Google ranked list is calculated such as: There are several evaluation measures in order to assess the system effectiveness. The two most frequent N appearings are: set-based measures (Precision and Recall), and P = (5) rank-based measures (Average Precision). Those meas- N rel _ ret ures are applied to the pages links from the ranking list, assuming that the relevance judgment is known. In where Nappearings presents the number of relevant SM this paper, binary relevance (relevant or non-relevant) sites within a ranked list. is assumed rather than graded relevance (relevant, par- According to (1), after Nret ranked retrieved docu- tially-relevant, or non-relevant) (Kekalainen, 2005). In ments, the Precision is calculated as (6): (Zhu, 2004), evaluation of those parameters is explained 1 Nret and some of their properties are already discussed in PrecisionN = ∑ x N = k (6) (Marjanovic-Jakovljevic, 2015). ret k 1 95 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

From (2), using the same notations, Recall can be 1 AveragePrecision (i) = (8) calculated such as (7): i

and Recall parameter has the constant value: 1 Nret Recallk = ∑ xk 1 N k=1 (7) = = rel Recall const. (9) N rel From (7), it is obvious that Average Precision is in- The difference of Average Precision (Fig. 3b) is cal- fluenced by the number of retrieved relevant documents culated as: and their position within the ranked list. For the sake of illustration, in Fig. 3 we assume that we have only one 1 ∆AveragePrecision (i) = − th ⋅ + (10) relevant page link on the i position within the rank list, i (i 1) where 1≤i≤Nret. In such case, Average Precision parameter is calculated as:

(a) Average Precision vs. Position of the relevant (b) ΔAverage Precision vs. Position of the relevant page link: Nrel_ret=1; page link: Nrel_ret=1; Figure 3. shows that the value of Average Precision and the difference of Average Precision is particularly expressed from 1st to 10th position, when having relevant document on two adjacent positions.

Since the relevance judgment depends only on user preferences, it will be interesting to examine what is the regular-

ity of the change in the Average Precision, if switching a number of non-relevant into relevant. Supposing that kswitched

 N  kswitched ret. presents the number of the switched judgments, we have 2   different possibilities. k switched 

th First, we assume only one switched judgment, i.e. kswitched=1 on the j position, where 1≤j≤Nret. Therefore, the obtained difference of Average Precision is expressed as (11):

DAveragePrecision(jx )= AveragePrecision(=- 1) AveragePrecision( x= 0) jj (11)

Average Precision in case where jth page link is not relevant, is presented as (12):

- 1 æöj 1 Nret AveragePrecision == ç Precision+ Precision ÷ (xj 0) çåå xxiiii÷ N çèøi=11ij=+ ÷ (12) rel_ ret

96 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

While, in the case where jth document is relevant, the Average Precision is presented as (13):

æöj-1 N 1 ç ret ''÷ AveragePrecision(xx== 1) ç ååPrecision+ Precision + xPrecision ÷ jj(N + 1) çi=1 ii ij=+1 ii÷ (13) rel_ ret èø

x ' th x ' = x ≤ ' = ≤ i present relevance judgments from j position and it is considered that i i for 1 i i Nret. and >> N rel _ ret 1, therefore, the change of Average Precision is calculated as: æ NNöæj ö 1ççrel_ ret ''÷÷11 rel_. ret 1' DAveragePrecision(j ) =ççPrecision +D=åxPrecision ÷÷ååxx + ççj ii÷÷k i Nççè ij=+11÷÷øèNjk=1 ij=+ i ø(14) rel_ ret rel_. ret

' 1 th ' where ∆Precisioni = presents the Precision difference on the i position where xi = 1 . i

Given that k simultaneous switches in relevance judgment produce the same difference of Average Precision as k successive single switches, therefore the total change of Average Precision can be expressed as a sum of Average Precision differences. Since ∆AveragePrecision ( j) > ∆AveragePrecision ( j + 1) , it is clear that the value of ∆AveragePrecision is higher when the switch is performed on the top of the ranked list.

Experiment Design and Results ◆◆ the web page is considered relevant if it is closely matched to the subject matter of the search query, In this study, the following parameters have to be and specified: search engine, search queries, data process- ◆◆ the page is categorized as non-relevant if it con- ing, and analysis. Since Google is the most used search sists of a whole series of links, or the site can not engine (Malik, 2014), in this experiment the precision be accessed, or is not related to the subject matter. of Google search engine has been evaluated. Generally, The column Relevance judgments, presented in the Google handles three major types of user queries, such Tables 1-4, shows the position of relevant (signed with as navigational, informational and transactional que- “1”) or non-relevant (signed with “0”) document within ries (Enge et al., 2012). Navigational queries mean that a result of 20 ranked web documents. Observing all three the user knows what is looking for, so it is enough to parameters, with the goal to present the significance of type “YouTube”, and Google recognizes what the user SM marketing, three experiments are described. wants, and shows the desired page. Informational que- In the first experiment, different narrow related tour- ries mean that the user types several keywords, such as ism topics, in term of IR evaluation parameters, are com- “bike”, “tourism” etc, and Google are using its relevancy pared. The queries are: “visit Belgrade”, “hotels in Bel- algorithm with semantic features to display search re- grade”, “restaurants in Belgrade”, “wellness in Belgrade” sults. Transactional queries are used when the user wants and etc. The highest accuracy is achieved when searching to purchase something on the web, and types for exam- hotels. The average highest precision (means when the ple “book a hotel”, or “I want to do aesthetic surgery in document is listed at the beginning more times than oth- Belgrade”. Here the Google’s semantic function plays an ers) is obtained when searching restaurants. The most ap- important role. pearing SM sites are TripAdvisor followed by Facebook. In this experiment, semantic search queries are for- In the second experiment, different health topics, as mulated using natural language. Acting as a foreign tour- wider tourism related topics, in the term of IR evalua- ist who wants to visit Belgrade, questions are placed in tion parameters, are compared. The queries are: “pri- the English language. For queries, a wide range of tour- vate clinics in Belgrade”, “dental implant clinics in Bel- ism related topics, such as medical tourism, educational grade”, “aesthetic clinics in Belgrade”, “acupuncture in tourism, were used. To research the relevance of search Belgrade” etc. The biggest average precision of 100% was results, all three IR evaluation parameters are calculated. achieved when searching aesthetic clinic in Belgrade, In addition, the type and position of the SM of a relevant since the top ten positions are relevant pages. The worst page, within the Google ranked list, is observed. In this results, according to all three parameters, are obtained experiment “hands-on” research is done. In order to when searching private clinics in Belgrade. SM appear make judgment about the relevance of web pages, the in a very low percentage (Table 2). following is considered: In the third experiment, different educational tour- 97 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Table 1. IR metrics of narrow tourism related topics Social Media Relevance Query Avg. Precision Precision Recall (followed by its P judgments position) 11010 00101 2. Facebook 1 0.47 0.35 0.7 0.285 00110 4. TripAdvisor 00000 11110 01110 2. TripAdvisor 2 0.5 0.82 1 0.200 01010 16. TripAdvisor 10000 11111 00010 1. TripAdvisor 3 0.62 0.35 0.7 0.285 01000 12. TripAdvisor 00000 11001 00000 4 01010 0.35 0.25 0.5 13. Facebook 0.200 00000 Average P 0.243

Table 2. IR metrics of health tourism topics Relevance Query Avg. Precision Precision Recall Social Media P judgments 01101 10101 1 00010 0.42 0.35 0.7 2. Blogspot 0.285 00000 11110 11111 2 00100 0.91 0.5 1 10. Youtube 0.100 00000 11111 11111 3 00000 1 0.5 1 0 00000 11111 11101 4 00010 0.96 0.5 1 0 00000 Average P 0.195

Table 3. IR metrics of educational tourism topics Relevance Query Avg. Precision Precision Recall Social Media P judgments 11011 11100 1 1 00010 0.78 0.5 1. Wikipedia 0.100 10010 11101 2. Wikipedia 01001 3. Wikipedia 2 00010 0.66 0.45 0.9 0.333 7. Facebook 01010 11111 4. Wikipedia 11100 6. LinkendIn 3 01100 0.94 0.5 1 7. Facebook 0.400 00000 8. Facebook 10011 00000 4 01010 0.28 0.25 0.5 1. Wikipedia 0.200 00000 Average P 0.250 98 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS ism topics, in terms of IR evaluation parameters are search results. The most visible SM are Facebook, Wiki- compared. The queries are: “private universities in Bel- pedia, and TripAdvisor. There may be numerous rea- grade”, “public universities in Belgrade”, “college of sons as to why SM do not occur in a large number. For electrical engineering in Belgrade”, “college of software instance, it could be that Facebook is blocking access to engineering in Belgrade” etc. The best results, in terms the crawlers so as not to burden their servers, or that of average precision, are achieved during the search of tourism content is just not sufficiently represented in electrical engineering in Belgrade, which also appears SM, or is not written in the English language. mostly on SM, such as Wikipedia, LinkedIn and Face- book. While the worst results, in terms of all parameters, References were achieved when searching the college of software engineering. Generally, it can be concluded that most universities are promoting via SM, and the most on Fa- Amerland, D. (2014). GoogleTM Semantic Search: Search cebook, LinkedIn, and Wikipedia. Engine Optimization (SEO) Techniques That Get Your Company More Traffic, Increase Brand Im- Conclusion pact, and Amplify Your Online Presence. 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Quality in Tourism and Hospitality

Enhancing the quality of tourism experience through destination interpretation as an aspect of competitiveness of protected tourism areas

Ivana Damnjanović Abstract: Contemporary tourism is going through incessant changes. Among major ones is the need for observing sustainability principles which represent foundations of competitive advantage. Protected areas would not exist without them. Also, Singidunum University, due to their multifaceted objectives that involve protection and tourism usage Faculty of Health, Law and Business alike, they are specific destinations that correspond to competitive advantage Studies requirements. Simultaneously, they attract environmentally aware and quality Valjevo, Serbia oriented demand. Quality is required through the entire service provision chain so superb tourism experience is delivered. To that end, destination interpretation plays a crucial role and is an integral part of management plans of protected areas. However, it depends on the highly trained stakeholders no matter if they are management staff, local service providers or community members.

Keywords: protected areas, sustainability, competitive advantage, interpretation, symbiosis.

Introduction

Observing the developments in the world in the last decade through the activities of the organizations dedicated to reducing poverty and improving people’s living conditions, reducing negative impacts and elimination of the effects of the use of environmental resources, protection of biodiversity, mitigation of climate change and the like, as well as multinational companies from various sectors of the economy, it can be noticed that the world is moving towards the so-called “green economy”. An example is TUI Group (2009, p. 80) which states that “consumers increasingly factor in the perceived ecological and social responsibility of companies in taking purchasing decisions” and directs itself towards the development of sustainable products adapted to the future needs, thus securing international competitiveness. Entire destinations base their development strategy on the principles of sustainability. In order to create a sustainable tourism product, all stakeholders in the tourism industry must be bound together in following and applying the same principles and standards. The modern tourist demand can only meet its needs if equal commitment to quality and Correspondence: Ivana Damnjanović sustainability exists in the entire chain of service delivery, thus creating a superb travel experience. Protected areas represent destinations whose e-mail: management is based on the principles of sustainability, according to the [email protected] purpose of their declaration and use. The manner in which a protected 101 Sitcon 2016 Doi: 10.15308/Sitcon-2016-101-107 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

area is interpreted to the visitors defines the quality of The demand for responsible tourism will continue to the travel experience. grow, and such products will gain increased market differentiation and competitiveness, thus penetrating into biodiversity conservation as a competitive new markets. Possibilities for starting tourism-linked advantage in the tourism market businesses that lean on biodiversity and natural resources will become more diverse and numerous (according to the study The Time for Biodiversity Business, IUCN, In contemporary tourism, the concept of sustain- 2009). The benefits arising from them belong both to ability represents a foundation of market competitive- the sector of tourism and nature conservation simulta- ness, while in the future it will stand for a fundamental neously. Those destinations and businesses setting the component of each product or service, based on the trend will most certainly gain a competitive advantage research of the needs of environmentally and socially (Marton-Lefevre & Borges, 2011, p. 83). aware demand. Such demand will increasingly direct the Serbia as a relatively new market can take advan- creation of tourism products. Accordingly, tourism as tage of this opportunity in time, creating a modern and one of the most important economic and lifestyle driv- sought-after tourism product in order to gain a compet- ers will become an integral part of the process of spread- itive advantage in today’s tourism market. An important ing environmental and social awareness on global, re- role in achieving such a goal may be developing tourism gional and local levels. The introduction and application products closely related to protected areas, from which of sustainability principles is not only about meeting ex- benefits can be drawn for both the preservation of en- isting regulatory requirements. It is also about market vironmental resources that are used in the provision of leadership, consumer satisfaction, and competitiveness such services, and responsible tourism sector including (Lipman & Vorster, 2011, p. 78). Bearing in mind the all the involved stakeholders. existing presence of sustainability principles in business, as well as its anticipated dissemination through tourism Protected areas tourism competitiveness and other sectors, there will emerge new opportunities through staff training and destination for establishing new and re-directing existing business- interpretation es. Nature-based and biodiversity-based tourism products will be increasingly invested in, as well as ecological Forces of competitiveness infrastructure maintenance, including protected areas. Lipman & Vorster (2011, p. 79-80) state that “we need “A nation’s competitiveness depends on the capac- to transform “classic tourism” dominated by considera- ity of its industry to innovate and upgrade“ Porter states tions of growth and market share into “smart tourism” (1990, p. 73). If needs and requirements of today’s tour- that is also inclusive, clean, green, ethical, and customer- ism demand characterized by ever-growing increase of and quality-orientated”. environmental awareness and the fact that “ecotourism Ever growing role and awareness of concern for bi- is one of the fastest-growing segments in the travel indus- odiversity protection and application of sustainability try“ (Hawkins, 2004, p. 220) are taken into account, Ser- principles can be seen through the fact that the year 2010 bia can achieve its competitiveness through the develop- was declared International year of biodiversity, and Inter- ment of nature-based tourism, including protected areas. national biodiversity day has been celebrated since 2002. According to Porter (1990, p. 79-82), factor condi- Increased awareness of natural resources value can be re- tions, in order to be translated to competitive advantage, garded through its enhanced value in business. Strategic should be specialized and tied to specific industries. Pro- plan 2011-2020 together with Aichi Biodiversity Targets tected areas represent a specialized tourism product, if was adopted at Convention on Biological Diversity. One there is adequate infrastructure within and on the ap- of the targets is to “reduce the direct pressures on bio- proach to them and the local population and workforce diversity and promote sustainable use” (Convention on are trained to provide highly specialized services. If Biological Diversity, n.d.). It is also stated that the role high-quality is achieved, foreign competitors will find of tourism for achieving the goal is crucial. On the other it more difficult to imitate them. In addition, strong hand, “the prosperity of the tourism industry is directly competition on a local level can trigger innovation in dependent on healthy ecosystems and the many services a constant struggle for competitiveness, so individual they provide, whether these are related to ecotourism, companies within the protected areas should use their beach holidays, skiing, or visiting national parks” (Mar- current shortcomings as an incentive for innovation, ton-Lefevre & Borges, 2011, p.82). rather than as an opportunity to circumvent it. 102 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Regarding demand conditions, the role of domes- Finally, the four groups of factors shown in Porter’s tic demand can often be decisive. It offers companies diamond of competitiveness cannot function indepen- a clearer picture of the modern needs of tourists, and dently. For example, in a protected area to which visi- the companies that detect them earlier have the advan- tors come primarily because of the specific features and tage of adequately meeting them before the competi- preserved nature, it alone cannot be the only reason to tion does. Most visitors to national parks in Serbia are create loyalty. It will be necessary to meet their needs domestic tourists, so by following their needs, potential through a variety of activities offered, especially those needs and demands of foreign tourists can be revealed. unique to special-interest tourism. Therefore, specially Related and supporting industries are of specific sig- trained guides who will provide an authentic experience nificance if they incite innovations and advancement, through the appropriate form of interpretation are nec- and even more so if strong business connections exist essary. Accommodation facilities must comply with the among them. Therefore, joint management of protected requirements of visitors of such specific destinations, areas and decision-making by protected area manage- with the obligatory observance of the principles of sus- ment, as well as local communities and service provid- tainability. Local communities should be familiar with ers on the local level is necessary. Proper distribution of visitors’ tourism needs and included in their fulfillment. the benefits from the provision of services will provide The state, on the other hand, must provide an ap- good business relations and cooperation at the level of propriate framework and conditions for running a busi- protected area as a tourism destination. “Suppliers and ness, managing resources in protected areas, their inclu- end-users located near each other can take advantage of sion in the country’s tourism development strategy, in short lines of communication, quick and constant flow its promotion, even in the process of brand creation. of information, and an ongoing exchange of ideas and Therefore, not only that all factors shouldn’t operate in- innovations“ (Porter, 1990, p. 83). That is particularly dependently, but should be mutually reinforcing. Fac- significant in the case of tourism destinations such as tors given in the competitiveness diamond should be protected areas. Their visitors can search for specific ex- viewed as parts of a system that stimulate one another periences, i.e. gastronomic, so the local food providers to develop. Based on Porter’s factors for achieving com- will have a market, while restaurants and hotels will be petitiveness, other system models for destination com- able to provide their guests with the expected service, petitiveness dealing with tourism specifics (Dwyer & thus reacting promptly to the newly-formed demand Kim, 2003; Ritchie & Crouch, 2003) are derived. needs and requirements. Consequently, all tourism service-provider stakeholders in protected areas operate in Specific protected areas management objectives a symbiosis. In this context, motivation of individuals to work Broadly viewed, objectives of sustainable tourism and acquire new skills is significant for achieving com- for protected areas should be divided into (Federation petitive advantage. Consequently, if all destination sta- of nature and national parks of Europe, as in Eagles, keholders operate in interdependence and have equally Bowman & Tao, 2001, p. 36): environmental, cultural, divided benefits, motivation is guaranteed. “A nation’s economic and social objectives (visitor satisfaction and success largely depends on the types of education its enjoyment; demonstration of alternatives to mass and talented people choose, where they choose to work, package tourism and promotion of sustainable tourism and their commitment and effort“ (Porter, 1990, p. 84). everywhere). Visitor satisfaction through recreation and Thus, the creation of close ties with educational insti- education represents an integral part of protected areas tutions dealing with education of tourism staff at all objectives, as primary, secondary or potentially appli- levels that incorporates the principles of sustainability cable in different protected areas categories (Table 1). and encourages creativity and innovation can be the basis for creating professional and modern staff that know how to provide visitors of protected areas with Education and training of service providers services they require and deliver them better than the in protected areas competition. Under the right circumstances, it should stimulate the entrepreneurial spirit, establishment of Protected areas, which have the role of tourism des- new businesses and creation of vacancies. This is the tinations, exist and operate in a world characterized by way to increase domestic rivalry which creates pressure constant change. In order to keep pace with the times for constant advancement of the sources of competitive and meet both visitors’ and conservational needs, they advantage. must have managers and staff that are ready to adapt 103 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Table 1. Protected areas management objectives according to categories

Protected area category

Habitat/ Protected area Management Strict Wilder- National Natural Species Protected with sustainable objective nature ness area park monu- manage- landscape use of natural reserve ment ment area resources

Tourism and - 2 1 1 3 1 3 recreation

Education - - 2 2 2 2 3

Key: 1 = primary objective; 2 = secondary objective; 3 = potentially applicable objective; -- = not applicable

Source: adapted from Davey, A.G. (1998, p. 49)

to them. Qualified, competent and committed staff are into three overall branches: training, organizational and central to the success of protected areas that depend career development. They also emphasize the role of staff on their willingness, competence, skills, capability, and training and believe it should be strategically planned in adequate resources (Kopylova, Danilina, & Valentine, order to provide meaningful learning experience for em- 2011, p. 1). It is very important that the protected area ployees and volunteers. management employs people with appropriate skills, or However, not only the members of protected area encourage existing staff to acquire them. Eagles, Bow- management need to possess the appropriate skills to man & Tao (2001, p. 59) provide a list of tourism com- carry out activities. Other stakeholders, in particular petencies that must be present within protected area providers of tourism and other services, based on natu- management: understanding visitors’ needs and wants, ral and cultural resources of the protected area, should service quality management, leisure pricing policy, lei- be included. Still, many people entering the ecotouri- sure marketing, tourism and resource economics, fi- sm sector have a remarkable lack of business skills and nance, tourism management and interpretation. necessary knowledge, especially in terms of identifying Kopylova, Danilina, & Valentine (2011, p. 2) believe viable market opportunities, business planning, marke- that formal university education today is generally not ting and finance management skills (Weaver, 2001, p. tailored to the needs of in-the-field protected areas pro- 566-568). Due to the fact that these entrepreneurs are fessionals and that short-term courses are the only pos- often members of the local community, and in order sibility for protected areas staff to acquire the needed to ensure the quality of services and visitors experien- competences. Davey (1998, p. 34) agrees additionally ces throughout the entire system of service provision, stating that there is a need to build research capacity it is necessary to make available opportunities for all in universities, especially in integrative and multidis- stakeholders, especially the local population, to acquire ciplinary approaches to environmental management, necessary skills and knowledge. It is imperative to en- particularly in developing countries, as well as that it is sure education opportunities for local communities not desirable that university and protected area personnel only for the purpose of economic benefits and increase working together so that both managers and research- in prospect of employment, but also for altering their ers better understand the capacities, priorities and con- attitudes and behavior, which would consequently lead straints both parties encounter. to observance and application of practices that will en- Eagles, McCool & Haynes state that (2002, p. 148-149) sure the preservation of natural and cultural resources “by applying well-ordered and professional approach to of the area for which it is protected. human resource management in protected areas field, the Due to the vast network of relevant stakeholders and skills, knowledge and attitude of park personnel will be to the benefits which derive from it, education and tra- enriched and the overall quality of work performed will ining are important means of protected areas manage- improve”, while dividing human resource management ment and must be included in the management plan. 104 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Interpretation on site. They usually include a shop of souvenirs, maps and guidebooks. Educational centers, which may be “Interpretation is a means of communicating ideas contained within visitor centers, have the role of provi- and feelings which help people understand more about ding educational services and often include classrooms themselves, their culture and their built or natural en- or workshops where corresponding activities may take vironment“ (Interpretation Australia Association, 2008 place. Exhibitions may be a comprising part of visitor/ in Wearing & Neil, 2009, p. 97), i.e. about the protected educational center, museum or can be mobile “mini- area they wish to visit. Its purpose is multifaceted. The centers” or exhibitions. Marked trails are paths with first is raising awareness of cultural and natural resourc- special interest locations with appropriate signage and es of a protected area, as well as respect for them and usually offer a map or recorded audio which explains understanding the area, which leads to greater visitor the area, which allows visitors freedom of movement at satisfaction with their recreational experience. However, their own pace. interpretation can also be a powerful means of manage- Publications, websites and DVDs are a cost-effective ment. Activities that visitors engage in are hereby di- way to reach large numbers of people. Publications can rected to be acceptable so management objectives can be in the form of brochures, flyers, maps, books, posters, be achieved, and visitor behavior is changed so as to postcards, calendars etc. minimize the negative and maximize positive impacts “Face-to-face interpretation is considered to be one on the environment. This is a path towards creation of of the most powerful and worthwhile interpretive tech- positive public relations for the protected area manage- niques available because it can be continually tuned to ment and staff members, which can be useful for car- the type of visitor(s) participating... and the particular rying out new policy initiatives (Eagles et al., 2002, p. interest of each group” (Wearing & Neil, 2009, p. 102). 108). Whether interpretation will lead to a change in It is provided by protected area staff members, tour attitude is largely dependent on the availability and ef- operators or individuals/ private companies. Activities fectiveness of resources required for ensuring materi- may include guided tours, theater plays, events simula- als that the general public can understand and that can tions and the like. Interpreters are people who should keep their interest on the site and upon return (Wearing be trained to provide specialist type of service. In order & Neil, 2009, p. 99). to fulfill its function, the interpretation has to be effecti- Interpretation does not start when tourists already ve. To that end, certain principles should be respected. reach destination, but much before. It can play a crucial First of all, interpretation involves language translation role in the decision-making process on which destina- of technical science or related fields into terms and ideas tion to visit since a potential tourist wishes to know what that people who are not scientists can easily understand. can be expected on the destination. “It is critical that However, it should not be limited to that. According to suitable expectations are set in advance, so that upon Ham (1992; Wearing & Neil, 2009, p. 95), “interpreta- arrival the visitor is aware of what can and cannot be tion should be entertaining and interesting to those pe- experienced“ (Eagles et al., 2002, p. 109). When at des- ople... Interpretation is pleasurable, relevant, organized tination, tourist’s needs for various types of information and thematic” (Ham, 1992). Interpreters, i.e. those who become more complex, more detailed. Another positive convey information and educate visitors, should create aspect of interpretation is that it does not directly im- personal connection with visitors. In order to do so, they pose the behavior rules and policies, but indirectly af- need to be plausible and compassionate. In addition, fects increased appreciation about the area, emotional they should present the whole picture using stories, le- connection with it, as well as voluntary changes in be- gends, myths or scientific discoveries. Narration should havior and attitudes that can be long-lasting. take place at the appropriate location which is connec- There are various interpretation techniques. Accor- ted to it, combined with corresponding activities, thus ding to Eagles, McCool & Haynes (2002), they are divi- emphasizing the importance of the site. Finally, effecti- ded into three groups: personal services (trained staff, ve interpreters include diverse media in their narration, guides etc.), non-personal services (technology aids, as well as physical activities and narration techniques publications, films etc.) and supporting activities and which stimulate senses and emotions. facilities (visitor centers, outdoor amphitheatres, na- Interpreters are, in a sense, tourism destination am- ture trails, information boards etc.). bassadors since they are often the first contact a tourist Visitor centers are useful for creating a “big picture“ makes with the destination and they contribute towards historical facts and processes that cannot be described creating tourist’s perception of it. “There is some debate 105 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

as to whether a local guide (i.e. one who is native to the are not carefully observed and appropriate techniques destination country or region or even local community applied. To that end, protected area management need being visited) is “better” than a foreign guide” (Weaver, to provide the whole array of stakeholders throughout 2001, p. 553). If they are local, they are closest to the the area tourism services provision chain with the same destination hosts, as well as a source of knowledge, ex- perspective, beliefs, attitudes and behavior. Those can perience, tradition, and they round off visitors’ overall be achieved through carefully planned and organized impression of the destination, while “foreign” ones may education opportunities for protected areas staff as well be more sensitive to visitors’ needs, perceptions and as local service providers and indirect local community frameworks of understanding. that benefits from the protected area. This particularly Finally, interpretation should have a theme, not just translates to the destination interpretation aspect of the a topic (Weaver, 2001, p. 556; Ham, 1992, p. 36-47). visitor experience creation. Who, how, when, where and If possible, a unique theme under overarching topic with what means delivers interpretation should be an integral part of management plan of the entire protect- should be chosen, and combined with sub-themes, ac- ed area. Interpretation, through its powers, is a hidden, tivities and the like facilitate bonding of the tourist and not-so-obvious restriction framework for visitors, con- destination, as opposed to transmitting loosely related trolling them while satisfying their recreational needs. pieces of information. “All the various types of services Therefore, it is considered a potent management tool. must be coordinated within an overall interpretive plan“ (Eagles, McCool & Haynes, 2002, p. 109). Increasingly environmentally-aware and quality-oriented demand specifically interested in protected areas Likewise, various stakeholders must be included: tourism product will reward such destinations through area staff administration, local residents and providers loyalty and adding to its increased competitiveness. of tourism and other services in the destination; uni- However, those protected areas that fail to provide the versities and scientific institutions that can contribute overall quality tourism service through carefully de- to educational work; and local, regional and national signed and delivered interpretation aimed at achieving destination management organizations. Interpretation ultimate and incomparable travel experience to visitors must, therefore, be carefully planned in line with other will be superseded by competitors. management objectives and take an important place in the management plan of a specific protected area. In this References way, the chance that the visitor returns to the destination increases as a result of visitor’s satisfaction, and it Convention on Biological Diversity. (n.d.). Aichi Bio- is the most direct indicator of tourism product quality. diversity Targets. Retrieved December 27, 2011, from https://www.cbd.int/sp/targets/ Conclusion Davey, A. G., IUCN World Commission on Protected Areas., & University College, C. (1998). National system planning for protected areas. Gland, Swit- Biodiversity simultaneous protection and sustainable zerland: IUCN-the World Conservation Union. usage lies at the foundations of contemporary tourism Dwyer, L., & Kim, C. (2003). Destination competitive- competitive advantage. Protected areas are specific in ness: Determinants and indicators. Current Issues their multifaceted management objectives, among which in Tourism, 6(5), 369-414. tourism, recreation and education play important roles. doi:10.1080/13683500308667962 Specific tourism product of protected area correspon- Eagles, P. F., Bowman, M. E., & Tao, T. C. (2001). Guide- lines for tourism in parks and protected areas of ds to specialized competitiveness factors necessary for East Asia. Gland, Switzerland: IUCN-The World achieving competitive advantage. This specifically appli- Conservation Union. es to presence of all the necessary skills and knowledge Eagles, P. F., Bowman, M. E., & Tao, T. C. (2001). Guide- with all stakeholders involved in providing such pro- lines for tourism in parks and protected areas of ducts/ services. Among such, also necessary for achie- East Asia. Gland, Switzerland: IUCN-The World ving recreational and educational objective of protected Conservation Union. areas, destination interpretation is essential. Eagles, P. F., McCool, S. F., & Haynes, C. D. (2002). Sus- tainable tourism in protected areas: Guidelines for There is evident connection between quality of tour- planning and management. Madrid, Spain: World ism services in protected areas and interpretation, i.e. Tourism Organization. quality strongly depends on how well interpretation is Ham, S.H. (1992). Environmental Interpretation: A Prac- planned and delivered. On the other hand, interpreta- tical Guide for People with Big Ideas and Small tion cannot be considered effective if certain principles Budgets. North American Press, Golden, CO. 106 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Hawkins, D. (2004). A protected areas ecotourism com- Porter, M. (1990). Competitive Advantage of Nations. petitive cluster approach to catalyse biodiversity Harvard Business Review, March+April. conservation and economic growth in Bulgaria. Ritchie, J. R., & Crouch, G. I. (2003). The competitive des- Journal of Sustainable Tourism, 12(3), 219-244. tination: A sustainable tourism perspective. Oxon, doi:10.1080/09669580408667235 UK: CABI Pub. Kopylova, S. L., Danilina, N. R., & Valentine, P. (2011). TUI. (2009). Sustainability report 2009/ 2010, Guests in Protected area staff training: Guidelines for plan- Paradise. TUI. ning and management. Gland, Switzerland: IUCN. Wearing, S., & Neil, J. (2009). Ecotourism: Impacts, po- Lipman, G., Vorster, S. (2011). Green Growth, Travel- tentials, and possibilities (2nd ed.). Oxford, UK: ism, and the Pursuit of Happiness. In J. Blanke, Butterworth-Heinemann. T. Chiesa, & The World Economic Forum (Eds.), Wearing, S., & Neil, J. (2009). Ecotourism: Impacts, po- The travel & tourism competitiveness report 2011: tentials, and possibilities (2nd ed.). Oxford, UK: Beyond the downturn. S.L., Geneva: The World Butterworth-Heinemann. Economic Forum. Weaver, D. B. (2001). The encyclopedia of ecotourism. Marton-Lefevre, J., & Borges, M.A. (2011). Green Growth, Oxon, UK: CABI Pub. Travelism and the Pursuit of Happiness. In J. Blanke, T. Chiesa, & The World Economic Forum (Eds.), The travel & tourism competitiveness report 2011: Beyond the downturn. S.L., Geneva: The World Economic Forum.

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Quality in Tourism and Hospitality

Measuring service quality in hospitality on the basis of user perceptions: A case study of Palić

Dragan Vojinović 1, Abstract: Taking into account the basic characteristics and peculiarities of the service 1 Ljubiša Vladušić , sector, and the importance of hotel business as a tourism industry segment, Milena Mirković2 the paper presents research results of measuring the quality of services in the hotel industry in the area of tourism facilities, based on the perceived customer satisfaction, through the methods of SERVQUAL. Hotel services are the crucial tourism segment, which is becoming dominant in defining the values in 1 University of East Sarajevo, economic and public life and its development, and is based on the needs of Faculty of Economics, consumers to meet their needs for rest, recreation, adventure, improving health Pale, Bosnia and Herzegovina status, religion, education, business arrangements etc. The quality of service 2 University of East Sarajevo, is the basic measure of consumer satisfaction or dissatisfaction. This research Faculty of Education in Bijeljina, aims to analyze the perceived value of services offered and expectations of the Bijeljina, Bosnia and Herzegovina. impact on the perceived quality. Empirical research was conducted in the area of the tourist complex Palić.

Keywords: expectations, hotel services, model, quality perception.

Introduction

It is not necessary to particularly underline the role and importance of the service sector, especially tourism, in economic trends, both locally and globally. Tourism, with its components, lodging and catering services, through direct and indirect action in all economic processes, has a function of an engine of development and basic values of economic and public life. The study of the phenomenon of tourism began “later’’ compared to other industries, but today is a system that is clearly determined theoreti- cally, practically proven and subject to the interests of individuals, businesses and the wider community. The recessive trends, and the economic crisis, the possibilities of the tourism industry, with all its specifics, are the basic mechanism, not only for the local development, but also their involvement in the global markets. Global economic trends and integrated processes, which are incorporated in all spheres of economic and social life, do not allow national economies autarchy, they force them to change the business, but at the Correspondence: same time, give them a chance to find themselves here. For instance, CEF- Milena Mirković TA agreement was signed in 2006 under the auspices of the European e-mail: Union, as the largest verified regional organization in the neighborhood [email protected] of the Republic of Serbia. 108 Sitcon 2016 Doi: 10.15308/Sitcon-2016-108-115 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Travel markets in the Republic of Serbia, and thus of natural and created the capacity for the provision of the tourist facilities, are more advanced and developed, services, achieved level of development, but we have to observing quantitative and qualitative indicators. This mention the underutilized features. According to Tan- discrepancy compared to other tourism markets should jug as of October 26, 2015, an important factor was the be accepted as a signal for concrete action to increase the allocation of representatives Palić, by the jury of the competitive advantages of tourism entities, and therefore international association of tourism journalists FIJET, a tourism destination. Tourism constitutes the basis for awards “The Golden Apple” as the number one destina- the realistic, sustainable development of the economy tion in Serbia. In addition, Palić laureates were Moscow of the Republic of Serbia and is based on the use of the and Dubrovnik. products and services of foreign and domestic tourists / The technical and functional quality of services as guests. Defining the concept of foreign or domestic guest well as the basic determinants of customer care point to must be analyzed in the procedural approach, and in the the undoubted importance of the communication as- market, and marketing orientation, we must equalize pect. Measuring service quality in theoretical considera- them through the prism of service operations to be re- tions and practical research has indicated certain prob- sponsive to their needs and motives of delivering supe- lems, which stem from the characteristics and nature of rior value and total quality. services and the specifics of the tourism market (Kotler A guest, visitor, consumer represents the formal & Keller, 2009). According to Beateson and Hoffman and essential meaning of existence the hospitality, and (2012), “quality of service is not the goal or program that balance sheet items of institutions the maximum value can be achieved or met, but it must be an integral part of their assets. Observed statistically, one customer to of the whole process of daily management and service the institution is not a condition of its existence, but we delivery. In the end, the quality of services is both art have to say that there are no institutions without a guest. and science.“ Competitive advantages sensed data on the number The quality of delivered services is becoming the of visits and duration of stay in a particular area, and in backbone of the organizational and functional efforts defined locations, built on the attitudes of individuals, of the tourism industry achieved through satisfaction- or through their perception of quality of experienced customer satisfaction. The consumer is satisfied when services. It has been said that the power of consumer bet their expectations are in line with their needs, desires, on the quality of hotel and catering services and tourism problems and demands, and this condition can lead to enterprise determines its market position. The level of the habit of re-purchase of the product or using the ser- service is not only the factor of success and survival of vice. The quality should be observed regarding certain the tourism sector, but the basis for its further sustain- components, customer satisfaction, expressed by the able development. The quality of services, viewed from concordance level between the expected and experienced the technical, functional and communication aspect is (Kosar & Rašeta, 2005). Customer satisfaction is typical- the care of the guest. The quality of service determines ly defined as a post consumption evaluative judgement the customer satisfaction, which directly reflects on es- concerning a specific product or service (Gundersen et tablishing and maintaining long-term relationships with al., 1996). them, and indirectly, it reflects the expectations of oth- In the long term, sustainable level of quality of ser- ers, potential customers through their mutual commu- vices in totality competitive relations or the fight for the nication, propaganda or “word of mouth”, no matter if customer represents the strongest and most effective it is positively or negatively oriented. weapon. This can be seen through the function of hotel business, care of the guest or guests’ notion as “king”. MEASURING THE QUALITY OF SERVICES The level of customer satisfaction achieved is adequate to the totality of all business activities in terms of satis- In order to measure the quality of services, a modifying its needs. Choi and Chu concluded that the staff fied “SERVQUAL” model has been used, with an em- quality, room qualities and value are the top three fac- phasis on the importance of the communication pro- tors that determine travelers satisfaction. Increasing cess between the tourist companies, or employees and competition in the tourism industry greatly affects he guests. Research and testing of expectations and per- performance of particular tourist operators and leads ceptions of survivorship services in hotel business and to personalization of services. Products or services mar- catering by consumers was conducted within a tourist keted by different suppliers basically have similar or the complex Palić. Selecting this place caused the existence same use-value in the process of creating a different 109 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

experience for guests. Moreover, perceiving the needs growth and development, shorter life span of products and desires of customers, is the most difficult task in the and services required, speed of decision making and the hotel and catering industry. creative, efficient and appropriate concept of two-way The quality of service experienced by the guest en- communication. compasses both material and personal aspect, and they Communication in all its forms, in relationships of create its expected service value individually (Ćosić, all participants should be based on knowledge, training, 2006). The material aspect of service quality is reflected and skills through the art of transmitting messages and through the senses of human beings and is represented responses by the employees. The aspect of communica- by the physical attributes of the object and the environ- tion follows the development of technology. However, ment, exterior and interior design, decorations, regular it must not ignore the impact of social networks, which room, staff appearance, taste and smell of food etc. Per- represent a golden opportunity for the tourism and ho- sonal aspect relates to intangible elements such as the tel industry, opening the possibility of a strong and di- way of receiving guests, the ratio of employees through rect contact with clients. their kindness, empathy, expertise, verbal and non-verbal communication skills and the totality of the activi- RESEARCH METHODOLOGY ties of all components of service culture. The preference for material or personal aspect in achieving an adequate Research on the attitudes of clients towards the qual- level of service quality would be wrong. Their synergy ity of hotel and catering services in a tourism complex effect through their interconnectedness, understand- Palić is based on the application of “SERVQUAL”, as ing, tolerance and cooperative relationship in the crea- a basic tool for the evaluation of the quality of services tion and delivery of services should be greater than the in the marketing literature for the services sector. This sum of the effect of certain aspects. Zeithaml and Bitner model treats the five determinants of quality, tangi- (2003) stated that in order to manage service quality, it bles, reliability, responsibility, security and compassion was important to manage the gaps between expectations through 22 pairs of Likert scale in relation to the ex- and perceptions on the part of management, employers pected and perceived customer satisfaction. Going into and customers. deeper analysis of the models and confirmation or de- The development of business relations, the intensity nial of the application of its efficiency in the past period of competition in the supply chain, changes in attitudes and the current agenda modifies our goal to define the of guests, technological advances leading to the forma- quality of service, thus emphasizing the communication of a certain standard and unification of standards tion aspect. Although there are studies on measuring of service quality. Differentiating from other becomes the quality of services in the hotel and catering indus- an imperative in the fight for market share. According try based on the original “SERVQUAL” model, this to Porter (2007), one way of achieving this goal is dif- research should make a contribution to the literature ferentiation that is “the result of specific activities that by defining the role of the communication aspect in company performs and their impact on customers.” In achieving customer satisfaction. As already mentioned, this respect, communication provides most opportuni- the main aim of the research is to measure the quality ties for this. of services, and verification of the model “SERVQUAL” Communication is basically a process of transferring developed by Parasuraman, Zeithaml and Bery. The information from the sender to the recipient and is of- purpose of measuring the quality of service is ascertain- ten identified with promotional activities. In the hotel ment the current status and level of quality and devia- and catering, broadcasting and receiving information tions of perceived quality than offered. is not the ultimate goal. The complexity of relation- Based on this model and when the difference be- ships in this industry opens a wide range of effects of tween perceived and expected is zero, it indicates the all forms of communication in the present and future necessity to fulfill guests’ expectations.The deviation time. “For managers, the challenge is to go beyond the up or down, or the negative or positive difference, talk surface of the thin smiling receptionist or looks brand about the delivery of services or higher value implies and ensure that the elusive quality of service you would poor quality of services. like more and more customers and that more were ex- Field research in the area of tourism facilities was pected” (Moutinho, 2005). Strong competitive relations, based on the primary data collection using the inter- technological innovation, uncertainty and business risk, rogative techniques by means of surveys. A question- radical change in attitudes of guests, the necessity of naire determined by the assessment of the scale Likert 110 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS attitudes of respondents from 5 value was used as a pri- RESULTS mary research tool, starting from 1 (strongly disagree) to 5 (total agreement). The questionnaire consists of two This research covered a sample of 55 respondents. parts that are structured on the basis of 22 questions, Out of the total number, 75% were domestic and 25% where the first part refers to the expectations, and the foreign guests, 53% were men and 47% women. Accord- second part to the perception of the quality of the guests. ing to the age of respondents, 36% aged 30 years, 18% The questionnaire consists of three dimensions of qual- aged 30-40 years, 18% aged 40-50 years, 15% aged 50-60 ity, arranged according to the principle of the original years and 13% have 60 or more years. “SERVQUAL” model. In order to determine the difference between expecta- The aim of the research is to determine the dimen- tions and perceptions, we used the t-test of independent sions of service quality in tourism and hospitality, and samples to compare the means of the results and deter- whether there are differences in the guest expectations mine the statistical significance of their differences. In in comparison to the “promised” and actual quality of our case, t - test was used to compare the arithmetic mean service. of two groups in terms of expectations and perceptions.

Table 1. Dimensions and quality issues to be assessed for the achieved level of customer satisfaction The location of the hotel and the restaurant should be affordable, with appropriate 1. 1...2...3...4...5 approaches and parking Exterior of the premises and the environment should be visually appealing with clearly 2. 1...2...3...4...5 prominent promotional tools The interior of the hotel and restaurant should be visually appealing, with a suitable 3. 1...2...3...4...5 arrangement of the rooms, neat and modern 4. Employees should be uniform and tidy 1...2...3...4...5 5. Hotel and restaurant should offer service at the agreed time 1...2...3...4...5 6. Employees should be always ready to help the guests 1...2...3...4...5 7. Guests need to feel safe and secure 1...2...3...4...5 8. Employees need to understand the specific needs of its guests 1...2...3...4...5 9. The provision of services should be performed without errors 1...2...3...4...5 10. The range of services should meet the needs of guests 1...2...3...4...5 11. Stay in the hotel and restaurant should be an unforgettable experience 1...2...3...4...5 12. Employees need to invest additional effort to interact with guests 1...2...3...4...5 13. Cozy and friendly atmosphere should rule in hotels and restaurants 1...2...3...4...5 14. Employees should be always present in addition to providing unobtrusive service The first impression of the hotel and restaurant should leave a strong, positive 15. 1...2...3...4...5 impression 16. Employees should have the communication skills 1...2...3...4...5 17. Objection guests will immediately be accepted and resolved in the shortest possible time 1...2...3...4...5 Employees should respect the principle of social structures (different genders, class, 18. 1...2...3...4...5 religion, age) 19. Verbal and non-verbal communication should be efficient 1...2...3...4...5 20. Hotel and restaurant services should always be provided with the same level of quality 1...2...3...4...5 21. On request should be given a timely, specific and accurate answer 1...2...3...4...5 22. When departure should be addressed appreciation for the use of services 1...2...3...4...5

111 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Table 2. T-Test for independent samples expectation and perception DETERMINANTS OF QUALITY AM SD T-test P Expectations 1 4,4545 0,878 0,600 0,551 Perceptions 1 4.3818 0,7326 Expectations 2 4,1091 0,91637 0,617 0,540 Perceptions 2 4,0182 0,84964 Expectations 3 4,2182 0,80946 0,724 0,472 Perceptions 3 4,1091 0,85359 TANGIBLES Expectations 4 4,3636 1,04285 1,016 0,314 Perceptions 4 4,2182 0,8754 Expectations 5 4,709 0,5667 3,839 0,000 Perceptions 5 4,254 0,8214 Expectations 6 4,60 0,56437 2,899 0,005 Perceptions 6 4,236 0,7444 Expectations 7 4,800 0,5252 3,782 0,000 Perceptions 7 4,3636 0,75434 Expectations 8 4,0545 1,0957 1,759 0,084 Perceptions 8 3,7455 0,9273 Expectations 9 4,099 0,94815 1,790 0,079 Perceptions 9 3,8182 0,92478 RELIABILITY Expectations 10 4,2909 .68510 2,257 0,028 Perceptions 10 4,000 .72008 Expectations 11 3,6727 1.05505 0,574 0,568 Perceptions 11 3,600 1.08184 Expectations 12 3,600 .97373 0,000 1,000 Perceptions 12 3,600 .99256 Expectations 13 4,4182 .83202 1,197 0,237 Perceptions 13 4.2545 .72567 Expectations 14 3.8364 1.06742 0,739 0,463 Perceptions 14 3.7091 .99392 Expectations 15 4.2364 .83807 1,211 0,231 Perceptions 15 4.0909 .84487 Expectations 16 4.4000 .70972 3,396 0,001 Perceptions 16 4.0000 .86066 Expectations 17 4,3273 0,74671 0,617 0,540 Perceptions 17 4,2364 0,85988 COMMUNICATION Expectations 18 4,2182 1,16573 0,531 0,598 Perceptions 18 4,1455 1,00771 Expectations 19 4,3273 0,81773 2,607 0,012 Perceptions 19 4,0182 0,89217 Expectations 20 4,4545 0,81236 3,334 0,002 Perceptions 20 3,9818 0,80487 Expectations 21 4,600 0,70972 4,929 0,000 Perceptions 21 4,0182 0,9524 Expectations 22 4,5818 0,91674 1,277 0,207 Perceptions 22 4,3818 0,9524 Source: Results of the research of the author Based on the results in Table 1, it can be concluded and O12-P11-P12. Finally, as regards COMMUNICA- that there are significant differences in expectations and TION determinants, statistically significant difference perceptions of determinants. exists in the tested pairs O13-P13, P14-O14, O15 and As regards quality determinants, TANGIBILITY test O17-P15-P17, P18 and A18-022-P22, while it cannot be shows that there is a statistically significant difference observed in other pairs. in test pairs O1-P1, P2-O2, O3 and O4-P3-P4 while it This can be seen if we observe the descriptive sta- cannot be observed for the other pairs. In the case of tistics for the expectations and perceptions of determi- the determinants of RELIABILITY, there is a statistically nants. significant difference in test pairs O8-P8, P9-O9, O11 112 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Table 1. Descriptive statistics for P0-P5 P0 P1 O2 P2 O3 P3 O4 P4 O5 P5 Mean 4.4545 4.3818 4.1091 4.0182 4.2182 4.1091 4.3636 4.2182 4.7091 4.2545 Median 5.0000 5.0000 4.0000 4.0000 4.0000 4.0000 5.0000 4.0000 5.0000 4.0000 Mode 5.00 5.00 5.00 4.00a 5.00 4.00a 5.00 5.00 5.00 5.00 Std. deviation .87809 .73260 .91637 .84964 .80946 .85359 1.04285 .87540 .56676 .82143 Rate asymmetry -.559 -.839 -.722 -.223 -.642 -.585 -.605 -.764 -.848 -.827 A standard error .322 .322 .322 .322 .322 .322 .322 .322 .322 .322 of asymmetry Measure flatness 1.523 .774 -.089 -1.131 -.511 -.467 1.659 .259 2.528 .318 A standard error .634 .634 .634 .634 .634 .634 .634 .634 .634 .634 of flatness Minimum 2.00 2.00 2.00 2.00 2.00 2.00 1.00 2.00 3.00 2.00 Maximum 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00

Table 2. Descriptive statistics for O6-P10 O6 P6 O7 P7 O8 P8 O9 P9 O10 P10 Mean 4.6000 4.2364 4.8000 4.3636 4.0545 3.7455 4.0909 3.8182 4.2909 4.0000 Median 5.0000 4.0000 5.0000 5.0000 4.0000 4.0000 4.0000 4.0000 4.0000 4.0000 Mode 5.00 5.00 5.00 5.00 5.00 4.00 5.00 3.00 4.00 4.00 Std. deviation .56437 .74445 .52352 .75434 1.09575 .92733 .94815 .92478 .68510 .72008 Rate asymmetry -.852 -.417 -3.439 -.724 -.851 -.618 -.863 -.352 -.447 -.618 A standard error .322 .322 .322 .322 .322 .322 .322 .322 .322 .322 of asymmetry Measure flatness .158 -1.068 4.683 -.862 1.284 .341 .526 .002 -.785 .829 A standard error .634 .634 .634 .634 .634 .634 .634 .634 .634 .634 of flatness Minimum 3.00 3.00 2.00 3.00 1.00 1.00 1.00 1.00 3.00 2.00 Maximum 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00

Table 3. Descriptive statistics for O11-P15 O11 P11 O12 P12 O13 P13 O14 P14 O15 P15 Mean 3.6727 3.6000 3.6000 3.6000 4.4182 4.2545 3.8364 3.7091 4.2364 4.0909 Median 4.0000 4.0000 4.0000 4.0000 5.0000 4.0000 4.0000 4.0000 4.0000 4.0000 Mode 4.00 4.00 4.00 4.00 5.00 4.00 4.00 4.00 5.00 4.00 Std. deviation 1.05505 1.08184 .97373 .99256 .83202 .72567 1.0674 .99392 .83807 .84487 Rate asymmetry -.770 -.769 -.729 -.288 -1.932 -.735 -.894 -.667 -.869 -.559 A standard error .322 .322 .322 .322 .322 .322 .322 .322 .322 .322 of asymmetry Measure flatness .453 .465 .449 -.400 1.901 .378 .334 .449 .068 -.434 A standard error .634 .634 .634 .634 .634 .634 .634 .634 .634 .634 of flatness Minimum 1.00 1.00 1.00 1.00 1.00 2.00 1.00 1.00 2.00 2.00 Maximum 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00

113 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Table 4. Descriptive statistics for O16-O19 O16 P16 O17 P17 O18 P18 O19 Mean 4.4000 4.0000 4.3273 4.2364 4.2182 4.1455 4.3273 Median 5.0000 4.0000 4.0000 4.0000 5.0000 4.0000 5.0000 Mode 5.00 4.00 5.00 5.00 5.00 5.00 5.00 Std. deviation .70972 .86066 .74671 .85988 1.16573 1.00771 .81773 Rate asymmetry -.761 -.904 -.900 -1.392 -.609 -.429 -.892 A standard error .322 .322 .322 .322 .322 .322 .322 of asymmetry Measure flatness -.634 1.503 .389 .768 .966 .070 -.240 A standard error .634 .634 .634 .634 .634 .634 .634 of flatness Minimum 3.00 1.00 2.00 1.00 1.00 1.00 2.00 Maximum 5.00 5.00 5.00 5.00 5.00 5.00 5.00

Table 5. Descriptive statistics for P19-P22 P19 O20 P20 O21 P21 O22 P22 Mean 4.0182 4.4545 3.9818 4.6000 4.0182 4.5818 4.3818 Median 4.0000 5.0000 4.0000 5.0000 4.0000 5.0000 5.0000 Mode 4.00 5.00 4.00 5.00 4.00 5.00 5.00 Std. deviation .89217 .81236 .80487 .70972 .95240 .91674 .95240 Rate asymmetry -.686 -1.891 -1.072 -1.819 -.705 -2.795 -1.783 A standard error .322 .322 .322 .322 .322 .322 .322 of asymmetry Measure flatness -.144 4.828 2.587 2.889 -.377 8.028 2.949 A standard error .634 .634 .634 .634 .634 .634 .634 of flatness Minimum 2.00 1.00 1.00 2.00 2.00 1.00 1.00 Maximum 5.00 5.00 5.00 5.00 5.00 5.00 5.00

Source: Author’s research

Furthermore, if we analyze the relationship between men and women, and foreign and domestic tourists, in terms of reliability and sensitivity, the results are as in the table below.

Table 6. T-Test for independent samples for tangibles and reliability

Tangibles Reliability t-test P M ± SD M ± SD Male 4,24 ± 0,97 4,09 ± 0,95 -2,173 0,030 GENDER Female 4,34 ± 0,83 3,97 ± 0,87 -6,836 0,021 Domestic 4,27 ± 0,93 4,04 ± 0,92 5,912 0,018 TOURISTS Foreign 4,23 ± 0,84 4,04 ± 0,82 4,503 0,037 Source: Author’s research 114 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

As the p<0.05 Ho is accepted with probability of 95% and similar studies should be carried out continuously and 99%, i.e. we can say that there are no statistically and at tourism destinations in individual tourism sector significant differences between tangibility and reliability institutions. The need for consumers of tourism services in men, women, local and foreign tourists. is not a static category, and is not offered by the competi- Research shows that in the process of communicati- tion, and self-assessment is a good guideline for building on, no matter if it is verbal or nonverbal, in all segments a strategic approach to guests. of consumers of their services, hoteliers and restaurateurs, special attention should be drawn to the satis- REFERENCES factory achievement of the atmosphere, the employee attitude in terms of interaction with guests, achieving results of the first-impression, acceptance and resolu- Bateson, J.E.G., & Douglas H.K. (2012). Marketing uslu- tion of complaints, respect for the principles of social ga. Beograd: Data Status. structure and communication in after-sales phase, or Choi, T.Y., & Chu, R. (2001). Determinants of hotel gue- “accompaniment” guests. sts’ satisfaction and repeat patronage in the Hong Kong hotel industry. International Journal of Hos- pitality Management, 20(3), 277-297. doi:10.1016/ CONCLUSION S0278-4319(01)00006-8 Ćosić, M. (2007).Upravljanje kvalitetom turističkih uslu- There has been growing demand to understand and ga. Beograd: Visoka turistička škola. identify services quality as the most important perfor- Gundersen, M. G., Heide, M., & Olsson, U. H. (1996). mance of the business policy in catering and hotel in- Hotel Guest satisfaction among Business Travel- dustry, and measuring the quality gets more and more lers: What Are the Important Factors? The Cornell important in the services marketing. Determining the Hotel and Restaurant Administration Quarterly, strategy of service quality is directly related to the 37(2), 72-81. doi:10.1016/0010-8804(96)83104-1 concept of consumer satisfaction. Delivering excepti- Kosar, L., & Rašeta, S. (2005). Challenges of Quality. Bel- onal service, superior value, is the most effective way to grade: The College of Hotel Management. achieve competitive advantage through implementati- Kotler, P., & Keller, K.L. (2009). Marketing management. on of adequate satisfaction ratings. Defining customer Upper Saddle River, NJ: Pearson Prentice Hall. satisfaction in the creation and delivery of services on Moutinho, L. (2005). Strateški menadžment u turizmu. presentation, a modified model showed the station de- Zagreb: Masmedia. viations from the expected and experienced quality of Parasuraman, A., Zeithaml V.A., & Berry L. (1985). A service. The research results showed that the method conceptual model of service quality and its impli- and procedure of communication with guests in many cations for future research. Journal of Marketing, ways determines the level of satisfaction. Communica- 49(4), 41-50. doi:10.2307/1251430 tion becomes an essential element of quality assessment Porter, M.E. (2007). Konkurentska prednost. Novi Sad: services. This means that the hotel and catering enter- ASEE. prise communication processes can reduce or eliminate Stephens, P.A., Buskirk, S.W., Hayward, G.D., & Mar- the gap between the expected and achieved satisfaction tinez del Rio, C. (2005). Information theory and ratings. Anticipating the needs of consumers and service hypothesis testing: a cal for pluralism. Journal of creation belongs to the past or the present time, with de- Applied Ecology, 42(1), 4-12. doi:10.1111/j.1365- livery in this regard relates to the future, where commu- 2664.2005.01002.x nication factors can contribute to increasing the value. Zeithaml, V.A., & Bitner, M.J. (2003). Service marketing: The aim of this paper was to evaluate the expectations Integrating customer focus across the firm. New and perceptions of guests in a tourist complex Palić. This York: McGraw-Hill.

115 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Quality in Tourism and Hospitality

Exploring the motives to visit belgrade by applying ahp method

Sanja Božić, Abstract: The principal aim of this paper is to explore the motives to visit Belgrade (the Tamara Višnić, capital city of Serbia), by applying the AHP (Analytical Hierarchy process) Milan Ivkov, method, as a new approach to exploring motivation in the tourism field. The survey was conducted in the form of an interview among 30 tourists in Miroslav D. Vujičić Belgrade, and the respondents were asked to express their preferences using Saaty’s scale between different motives of visit. The motives included in the study were: Cultural motive, Business motive, Nightlife and entertainment, University of Novi Sad, Religious motive and Gastronomy. For each motive, the study also explored Faculty of Sciences, sub-motives and, as a result, the ranking is provided for each group of motives Department of Geography, Tourism and their sub-motives. The results indicate that the most dominant motives and Hotel Management, are Cultural motives (0.262) and Entertainment and night life (0.249), while the least dominant is Religious motive (0.058). Novi Sad, Serbia Keywords: travel motivation, AHP, Belgrade, city tourism. Introduction

Human behaviour is both directed towards satisfying certain needs, but it also results from them (Maslow, 1943). In order to understand motivation in tourism, it is necessary to understand what motivates tourists to choose a certain destination. Pearce, Morrison and Rutledge (1998) explain tourist motivation as biological and cultural forces that affect our travel choices, behavior and experience. People travel for various reasons in order to satisfy their different needs, which then influences their choices of destination. Hence, reasons to travel are the factors that affects people’s choices of destinations in different ways. Therefore, it has been a significant subject of many tourism studies in the past, but also nowadays (Plog, 1974; Crompton, 1979; Dann, 1981; Pearce, 1995; Sirakaya & Woodside, 2005; Hsu & Huang, 2008; Li & Cai, 2012; Jiang, 2015; Leong et al., 2015; Li et al., 2015). Motivation research is of particular importance in tourism since travel is performed for a number of motives/reasons. Being conversant with the motives is the basis for understanding the key trends within the tourism market and the creation of an adequate program of marketing activities Correspondence: (marketing mix). Sanja Božić The paper sought to investigate the travel motives for visiting Belgrade. e-mail: Belgrade is the capital of Serbia and has a population of around 1.6 mil- [email protected] lion people. It is situated at the confluence of the Sava and theDanube 116 Sitcon 2016 Doi: 10.15308/Sitcon-2016-116-121 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS rivers. It is the capital of Serbian culture, education, sci- the respondents were asked to express their preferences ence and economy. As a result of its vivid and dynamic (using Saaty’s scale) between different motives of visit. history, Belgrade has been home to many nationalities After that, they were also asked to express their prefer- and is consider a multicultural city (Vujović, 2003), and ences separately between different subcategories of each it has become a very attractive tourism destination. The group of motives. Thus, the final results of the study were principal aim of this paper is to explore the motives to based on the responds of 30 visitors of different age (av- visit Belgrade, by applying the AHP (Analytical Hierar- erage age 27.32 years), 59% of which were female, and chy process) method. Although dating from 1980, the the majority of them (63%) on the territory of Serbia, AHP method has recently found its application in tour- while the rest were foreign visitors (Slovenia, Bosnia and ism field (Lee & Lee, 2015; Wang et al., 2016; Božić et Herzegovina, Austria, Germany, Hungary). al., 2016). The AHP approach is used to construct an evaluation model and calculate criterion weights. It is RESULTS AND DISCUSSION mainly used for ranking decision alternatives. This research provides the ranking of the pull motives to visit The obtained data were analyzed in the Expert Choice Belgrade, which could be useful to decision-makers on 2000. As a result, the ranking of the motives to visit Bel- destination level, such as action plan makers, tourism grade was derived (Figure 1). It shows that the most dom- organizations etc. inant motive of visit is the cultural motive, followed by entertainment and nightlife and business motive, while METHOD the least dominant motives of visit are gastronomy and religious motive. For the purpose of this study, the AHP approach was Dominance of the cultural motive (26.2%) can be implemented. This method, developed by Saaty (1980), explained by the fact that Belgrade is one of the old- is reputed to be one of the most commercially available est cities in Europe with the rich cultural and historical decision making systems, as well as one of the most ex- heritage. This also resulted in the fact that Belgrade is tensively used multi-criteria decision making methods. nominated for the European city of culture for the year This method represents a “qualitative” technique that 2020. If we further analyze sub-motives within the cul- relies on the judgment and experience of decision mak- tural motive (Figure 2), it can be seen that the architec- ers. AHP gradually compares alternatives and measures ture of the city (26.7%) and attractive cultural heritage their impact on the goal, which enables making the right (18.4%) are the most dominant. At the moment, Bel- decision (Saaty, 1980; Saaty, 2008). In tourism field, it grade has 333 cultural assets, 10 cultural-historical units, is often used to make priorities in tourism strategies 296 monuments of culture, 21 archeological localities (Lee & Lee, 2015), for the ranking of tourism prefer- proclaimed by the Institute for Protection of Cultural ences (Wang et al., 2016) or for making the hierarchy Monuments (Development strategy of the city of Bel- of travel motives to visit a certain destination (Božić et grade, 2008). This resulted in diverse architecture and al., 2016) etc. rich cultural heritage from various periods, thus creat- In this study, the goal is to obtain the ranking of the ing the basis for cultural tourism development. motives to visit Belgrade. The motives are criteria, while The least dominant motive is permanent museum sub-groups within those two major groups are sub-cri- exhibitions. Belgrade has a wide array of museums from teria. As a result, we derived the criterion weights based different areas (Natural, Ethnographic, City museum, on a survey done in Belgrade. This means that we didn’t Museum of Nikola Tesla etc.). However, it seems that include several alternatives in the comparison, but we their permanent exhibitions are not so attractive to put an emphasis on the comparison of criteria, in this tourists in comparison to other attractions. This finding case motives for visit. The motives to visit Belgrade in- requires some further research. cluded in the study were chosen by suggestions of the The cultural motive is followed by entertainment panel of tourism experts (Professors in tourism field). and nightlife (24.6%), which assumed the second place. The survey was conducted in the form of an inter- Belgrade is reputed to be a very vivid and exciting city, view among 30 tourists in Belgrade. The interview was and many people, especially from the region, visit this conducted from April to August, 2015 in the following city just to experience its rich nightlife. hotels in Belgrade: Hotel Royal, Crowne Plaza, Holiday The results show that the most dominant motives Inn, Slavija, Majdan and Srbija. The interviews were within entertainment and nightlife are of the respond- conducted with the help of hotel receptionists. Firstly, ents Diversity of entertaining programs (24.9%) and 117 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Figure 1. Ranking of the motives to visit Belgrade

Figure 2. Ranking of submotives within Cultural motive

Figure 3. Ranking of sub-motives within Entertainment and Nightlife 118 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Figure 4. Ranking of sub-motives within business motive

Figure 5. Ranking of submotives within Gastronomy motive

Figure 6. Ranking of submotives within Religious motive 119 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Availability of entertainment activities (19.4%). On the sacred sites (0.314), having in mind that Belgrade boasts other hand, the least ranked sub-motive is Unique music numerous objects of sacral architecture considered one offer, as majority of tourists are from the Balkans, where of the most valuable in the Balkans. The last place in the music offer is quite similar to Serbian. religious motive category takes Learning about religion The third ranked motive is Business motive (24.2%). (0.103), which is considered the least important when This motive refers to the opportunities for organization visiting Belgrade. of conferences, congresses and other business events, but also attractiveness of Belgrade as a business tourism CONCLUSION destination. Since the establishment of the Serbia Con- vention Bureau (SCB) in May 2007, set up with continu- Numerous empirical studies have explored travel ing training and support from Gaining Edge1, Serbia has motives for various destinations, by applying different been attracting and winning many major events in the methods. This article particularly shows the suitability South East Europe despite being a relatively new player of the AHP model for travel motivation research, by in the world conference market. According to ICCA providing decision makers with a hierarchy of motives report 2014, Belgrade obtained 50th world ranking (for they should take into consideration according to their number of meetings per city - 50) and 27th ranking in own priorities. Europe, which indicates that Belgrade will soon be at the forefront of Europe’s meetings industry (Gaining This study contributes to the overall understanding Edge, 2016). of what motivates tourists to travel to a specific destination. The findings revealed the most dominate travel The most dominant motives are Additional facili- motives influencing tourists to select Belgrade as their ties and offer as well as Authenticity of place for making business. Belgrade is an attractive place for organization destination choice included Cultural motives (0.262), of various events and it offers wide range of different Entertainment and night life (0.249) and Business mo- facilities for events from luxury hotels, equipped for tives (0.242). When it comes to focusing the marketing organization of business meetings to congress centers efforts, marketing campaigns and promotional material (such as Sava centre). should especially focus on cultural motives and night life and entertainment, since these were ranked as the Business motives are followed by Gastronomy mo- highest motivators for tourists. tive (0.190). Gastronomy represents an important motive for visiting a certain destination, having in mind It is important to mention that this study also has that it reflects the lifestyle of its habitants. certain limitations. The study sample predominantly consists of domestic tourists which could affect the hier- Heterogeneous cuisine, sharing the characteristics of archy of travel motives. Future research should explore the Balkans, the Mediterranean, Turkish and Hungarian travel motives of domestic and international tourists sep- cuisines is what distinguishes Belgrade from other des- arately, to compare the reasons for visit of these groups tinations. There are currently 1401 restaurants in Bel- and derive the appropriate marketing strategies based grade2 that offer traditional Serbian and international cuisine, so the results show the domination of Diversity on those findings. Moreover, the future study should of national and international restaurants (0.235) within include more respondents to surpass possible biases in the group gastronomy. Right after the diversity of na- making conclusions based on results. tional and international restaurants is a motive diversity of different cuisine (0.235), having in mind that tourists REFERENCES have the possibility to choose between different cuisines. On the other hand, the motive large portions (0.098) was considered the least important when visiting a restau- Božic, S., Spasojević, B., Vujičić, M., & Stamenkovic, I. rant. (2016). Exploring The Motives Of Religious Travel By Applying The Ahp Method: The Case Study Of The least ranked among others is religious motive Monastery Vujan (Serbia). International Journal of (0.058), considering that all other motives are more at- Religious Tourism and Pilgrimage, 4(4), Article 4. tractive then religious ones. Retrieved September 16, 2016 from http://arrow.dit. Among the motives within religious motive, the first ie/ijrtp/vol4/iss4/4 place was obtained by Artistic and architectural value of Crompton, J.L. (1979). Motivations for pleasure vacation. Annuals of Tourism Research, 6(4), 408-424. 1 Case study: Serbia Convention Bureau http://gainingedge. com/case-study-05/ Dann, G. (1981). Tourism motivation: an appraisal. An- 2 Belgrade restaurants - www.restorani.biz/beograd/ nals of Tourism Research, 8(2), 187-219. 120 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Erić, D. (2007). Strategija razvoja turizma grada Beogra- Li, M., & Cai, L.A. (2012). The effects of personal val- da. Beograd: Institut ekonomskih nauka. ues on travel motivation and behavioral inten- Gaining Edge. (2016). Case study: Serbia Convention tion. Journal of Travel Research, 51(4), 473-487. Bureau. Retrieved September 16, 2016 from http:// doi:10.1177/0047287511418366 gainingedge.com/case-study-05/ Pearce, P., Morrison, A.M., & Rutledge, J.L. (1998). Tour- ICCA. (2014). Statistics report 2014. Retrieved Septem- ism: Bridges Across Continents. Sydney: McGraw- ber 16, 2016 from www.iccaworld.com/dcps/doc. Hill. cfm?docid=1789 Pearce, P.L. (1995). Pleasure travel motivation. In R.W. Hsu, C.H.C., & Huang, S.S. (2008). Travel Motivation McIntosh, C.R. Goeldner, & J.R. Brent Ritchie (Eds.), Theory and Research. In A.G. Woodside and D. Tourism: Principles, practices, philosophies, (pp. 167- Martin (Eds.), Tourism Management: Analysis, Be- 190). New York: John Wiley. havior and Strategy. Cambridge, MA: CAB Inter- Plog, S.C. (1974). Why destination areas rise and fall in national popularity. Cornell Hotel and Restaurant Quarterly, Jiang, S. (2015). Using means-end chain theory to ex- 14(4), 55-58. plore travel motivation: An examination of Chinese Restorani Biz. (2016). Belgrade restaurants. Retrieved Sep- outbound tourists. Journal of Vacation Marketing, tember 16, 2016 from http://www.restorani.biz/beo- 21(1), 87-100. doi:10.1177/1356766714535599 grad/ Maslow, A.H. (1943). A Theory of Human Motivation. Saaty, T. (1980). The Analytical Hierarchy Process: Plan- Psychological Review, 50, 370-396. ning, Priority Setting, Resource Allocation. New York: Leong A.M.W., Yeh S.S., Hsia Y.C., & Huan T.C.T.C. McGraw-Hill. (2015). Nostalgia as travel motivation and its impact Saaty, T. (2008). Decision making with the analytic hi- on tourists’ loyalty. Journal of Business Research erarchy process. International Journal of Services 68(1), 81-86. doi: 10.1016/j.jbusres.2014.05.003 Sciences, 1(1), 83-98. Lee J., & Lee H. (2015). Deriving Strategic Priority of Sirakaya, E., & Woodside, A.G. (2005). Building and test- Policies for Creative Tourism Industry in Korea ing theories of decision making by travellers. Tour- using AHP. Procedia Computer Science. 3rd In- ism Management, 26(6), 815-832. ternational Conference on Information Technology Vujović, B. (2003). Beograd. Beograd: IDEA. and Quantitative Management, ITQM 2015, (pp. Wang, X., Li, X., Zhen, F., & Zhang, J.H. (2016). How smart 479-484). is your tourist attraction? Measuring tourist prefer- Li, H., Pearce, P.L., & Zhou, L. (2015). Documenting Chi- ences of smart tourism attractions via a FCEM-AHP nese tourists’ motivation patterns. In E. Wilson, M. and IPA approach. Tourism management, 54, 309- Witsel (Eds.), CAUTHE 2015: Rising Tides and Sea 320. doi:10.1016/j.tourman.2015.12.003 Changes: Adaptation and Innovation in Tourism and Hospitality, (pp. 235-246). Retrieved September 16, 2016 from http://search.informit.com.au/docu mentSummary;dn=210966631001071;res=IELBUS

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Quality in Tourism and Hospitality

THE ROLE OF TECHNICAL MEASUREMENTS IN QUALITY OF SERVICES IN TOURISM: SMART SENSOR HUB FOR WELLBEING

Tamara Jakovljević Abstract: This paper deals with the influence and applicability of technical measurements in creation a new offer for innovative tourism and its reflection on tourism quality. It discusses the potential of measuring the environmental and human University of Belgrade, body conditions in order to achieve the best solutions for wellbeing. That can Faculty of Organizational Sciences, also be used as a new measure of customers and requirements satisfaction, as Belgrade, Serbia one of the most important facts for tourism offer and quality management. The paper is addressed to decision makers, quality and tourism managers, who consider innovation a competitive advantage. Keywords: measurement, quality management system, tourism, innovative tourism, tourism quality.

Introduction

The authors shall start by saying something about the field of interest of this paper, i.e. the quality and tourism. If we look closer at the development of quality and quality movement in general, we can conclude that the fundamental needs for the emergence of quality on the global market and society can be generated from the quality movement development. Namely, it dates back to the medieval period in Europe, where the crafts- men were organized in unions, so-called guilds, in the late 13th century. Quality management in the guilds assumed a very important place. It created check-ups, controls and certain forms of audit, performed by crafts- men, to ensure compliance with the quality specifications (Filipović & Đurić, 2008). The quality system is defined as “a set of interrelated or interacting elements using a variety of resources to achieve the quality-related objectives.” These are focused on fulfilling and overcoming the user’s requirements (Filipović & Đurić, 2010). Furthermore, ensuring quality facilities or services for tourists is an essential factor for generating sustainable products, particularly in terms of smaller and less accessible market segments that are heavily dependent on the natural and cultural heritage. If high-quality tourism products are Correspondence: Tamara Jakovljević generated, it is more likely that the tourists will be more satisfied and will have positive travel experiences. Additionally, they will most probably stay e-mail: longer, return to the destination, recommend it to others and would care [email protected] about the preservation of the local heritage (European Commission, 2002). 122 Sitcon 2016 Doi: 10.15308/Sitcon-2016-122-129 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Tourism is one of the key development sectors in ment data helps to quantify risks, and provides informa- all countries and the main source of income, jobs and tion about whether risks have been successfully miti- wealth creation. It also plays an important role in pro- gated (US Army, 2005). moting the country’s image externally and shaping the complementary domestic policies. Policy makers and MEASUREMENT IN TOURISM tourism experts should devote considerable attention to understanding the country’s tourism competitiveness There is a different set of criteria for tourism meas- and providing evidence necessary for the decision mak- urements, particularly in terms of quality. If we talk first ing process (Dupeyras & MacCallum, 2013). about competitiveness, we could find a few significant As regards the quality of services, considerable at- initiatives at industry level. tention is devoted to providing a personalized, genuine Evidence reveals that the country’s initiatives towards and informed service with the aim to be as efficient and producing competitiveness indicators remain rather par- professional as possible (European Commission, 2002). tial and unequal in terms of content. Therefore, measurement can be beneficial in numer- In OCED tourism papers we find a definition based ous ways in terms of tourism and quality of services. on the understanding of the key elements related to Usually, what is taken into account is a subjective at- tourism competitiveness. It shows that the competitive- titude of users, but technical measurements may enable ness of a destination is determined by its ability to opti- us to improve our offer using an innovative approach mize its assets for the residents and visitors, to provide to tourism. consumers with quality, innovation and uniqueness of its tourist offer, but also, to prove that the available re- TECHNICAL MESAUREMENTS sources stimulate tourism and are being used efficiently and sustainably. Thus, it is necessary to perform measurements as Also, we can see that the key indicators for compe- human beings first began trading with their neighbors. tence analysis have been determined. They are divided Besides trading, early societies also had to perform vari- into four categories and are, as follows (Dupeyras & ous other tasks. The change from leading a nomadic life MacCallum, 2013): to settling in one place imposed the necessity of per- ◆◆ Indicators measuring the tourism performance forming other measurements, such as those of land and and impacts; building materials (UNIDO, 2006). ◆◆ Indicators monitoring the ability of a destina- Technical measurements represent a group of meas- tion to deliver quality and competitive tourism urement actions whose aim is to make the supplier and/ services; or acquirer conversant with the process of development ◆◆ Indicators monitoring the destination attractive- of technical solutions, ongoing assessment of the related ness; risks and issues, and the probability of fulfilling the vital ◆◆ Indicators describing policy responses and eco- objectives of the acquirer. It is planned at an early stage nomic opportunities. of the life cycle and performed with considerable and In the remaining part of the paper, we may use the ever-growing level of commitment along with the devel- given indicators for solving the case studies and deter- opment of technical solution (US Army, 2005). mining the correlation between technical measurements In case of prosperous measurement implementa- and finding innovative solutions in tourism. tion, the results are used by the management for decision making. It can also be used for operations needed Measurability of quality in hospitality categorization to reduce risks or potential problems. In daily activities, decision makers cannot wait for In numerous countries, the basic required hotel perfect data to plan their businesses, but they can rely services are determined by law. That means that by on the analysis of the best available data complemented providing that minimum, we actually provide the basic with real-time events and qualitative insight. guarantee of quality. That minimum is the foundation Risk management aims at determining information for achieving the mandatory quality and categorization. needs that can have a bearing on the project and organi- According to Kosar (2012), categorization repre- zational performances and which should be objectively sents the process of rating mandatory quality based on explained with the measurement results. The measure- the predefined criteria and it encompasses environ- 123 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

mental, technological, organizational and procedural QUALITY OF LIFE AND TOURISM features of the hotel product. In another case, technical and technological catego- Life quality is defined as an individual’s perception rizations need to be measured against the precise indi- of their position in the context of culture and related cators. This applies to the quality components that are value systems and in agreement with their goals, expec- easy to measure. On the other hand, categorization of tations, standards and concerns. provided services, as well as consideration of certain pro- It is a broad-ranging concept incorporating in a cesses, is more difficult to evaluate relying on the qual- complex way the person’s physical health, psychologi- ity and turn into measurable categories. It is certainly cal state, level of independence, social relationships, per- important to find methods and techniques to measure sonal beliefs and their relationship with the salient fea- services, in order to deliver the report on the quality of tures of the environment (The WHOQOL Group, 1995). services provided. The quality of life (QOL) concept can considerably vary along the dimension of objective and subjecti- Measuring the employee competence ve, normative and individualized. Subjective QOL is a broad term that covers happiness, subjective wellbeing, and life satisfaction (Sirgy, 2001). The studies Competence is a set of knowledge, skills and at- on subjective QOL place special emphasis on perso- titudes that are vital for the overall business perfor- nal experience and perceptions about one’s life qua- mances, and it can be measured on the basis of the lity. The term can sometimes be used reciprocally with predefined standards and enhanced through continuo- “subjective well-being” of individuals in the literature us education and training (Lucia & Lepsinger, 1999). (Costanzaa et al., 2007). Competitiveness can be explained by three groups of Subjective well-being can also be defined as custo- characteristics: knowledge required for work, desire for mers’ perception and satisfaction with his/her overall work and opportunity for work (Stanivuković, 2000). life quality. Measuring quality in the context of compatibility with the tourists requirements QUALITY OF LIFE

According to Kosar (2012), this means comparing the level of satisfying the consumers’ needs and the level OBJECTIVE SUBJECTIVE of their satisfaction. That means that the emphasis sho- INDICATORS INDICATORS uld not solely be on the services provided, but also on - Economic production - Satisfaction with life in how they are provided. The difference between the two indices (Gross Domestic general –Happiness could be measured using the statistical methods, which Product, Poverty rate etc.) - Job satisfaction should be used to track and interpret the consumers’ - Social indicators - Sense of safety behavior. The results should point to the mistakes in (Unemployment rate, - Sense of social well-being the service and help to eliminate them for the sake of School attendance rate etc.)- Sense of family well-being improving the overall quality. - Life expectancy - Satisfaction with material - Literacy rates life Measuring Visitor Satisfaction - Class identification Figure1. Objective and subjective measures of QOL One of the key measurement categories in tourism is Source: Michalos (2008) visitor satisfaction, which is influenced by recommendations, as well as quality indicators. Feedback provided Quality-of-Life Measures by visitors is very important for evaluating the quality. When it comes to the visitors themselves, their decisions There are two main approaches to measuring life are partly influenced by the media which provide infor- quality: objective and subjective. These entail diverse mation on the given location. conceptualization and understanding of the notion. The That is perhaps the main indicator for identifying difference between subjective and objective measures and comprehending the consumers’ behavior, and the of QOL is determined based on their connection with value of their experience when creating new offers. customers’ “subjective awareness” (Veenhoven 2006). 124 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Objective indicators are not much subject to awareness Well-being has been defined by personal character- of tourists and guests. For instance, income level of an istics of an innately positive condition (happiness). It individual does not change along with his or her per- has also been defined based on how self-esteem can be ception. On the other hand, subjective QOL indicators measured on a continuum from positive to negative. It are immediately affected by perceptual differences and can also be formulated in terms of one’s context (stand- subjective assessments (Costanzaa et al., 2007; Gallo- ard of living), absence of well-being (depression), or in way, 2006). a collective manner (Pollard & Lee, 2003). As written in the report “Wellbeing and policy”, Tourist Satisfaction and QOL countries worldwide are becoming attracted to these appealing ideas but are worried about how they can be The research on the quality of life is undoubtedly implemented in real life. The authors are of the opinion connected to the consumer satisfaction, or visitors, in that such ideas could encourage the governments and the case of tourism. Frich (2006) interchangeably uses individuals to make ‘better’ decisions that would con- the concepts of life satisfaction and quality-of-life. He tribute to enhancing the overall wellbeing. believes that providing personal reports on service satis- Chancellor Merkel pointed to the relevance of the faction significantly correlates with the satisfaction with notion of wellbeing by stressing the following: Industri- the quality of life. alized countries do not only have the GDP and growth Personal satisfaction is also affected by a person’s issues. career and family, which has an effect on their overall Even hard-nosed central bankers, like Ben Bernan- wellbeing. ke, have argued: The ultimate purpose of economics, of course, is to understand and promote the enhancement Wellbeing of wellbeing. Very few academics would argue that a country The quality of life is also identified as an overall well- should invest efforts into maximizing the GDP. being comprising objective descriptors and subjective The connection between tourism and economic de- evaluations of physical, material, social and emotional velopment has long been recognized by both theoreti- well-being along with the level of personal development cians and experts looking for development solutions and purposeful activity weighted by a personal set of for third-world countries and the overall reduction of values (Felce & Perry, 1993). poverty.

Figure 2. Subjective Aspects of Tourists’ Quality-of-Life (QOL) Source: Adapted from Neal et al. 2007.

125 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Figure 3. Life satisfaction – selected EU-countries 1973-2003 (% very/fairly satisfied) Database: Eurobarometer. Source: Møller (2008)

Tourism encompasses both wellbeing and the qual- Consequently, they use measurements in their own ity of life. Since tourism provides rest, relaxation and business. they have accreditation and measure for oth- new experiences, that in itself increases the degree of the ers, with the motto “We measure, you grow”. The re- quality of life and wellbeing in general. sults show that they have been recognized as a symbol Also, this should be used as a basis when creating of quality, excellence and trust by the market. new forms of tourist offers, which should aim to have a In a new phase of business development, Lotrič cre- positive effect on sustainable development and social re- ated its first market product, a smart sensor hub “Exac- sponsibility, which in turn are closely tied to the concept tum”, which had its world premiere at Milan Expo 2015. and the increase of subjective wellbeing and the quality We can now see in practice a new concept for meas- of life. uring wellbeing parameters with the support of sensor technologies, which can also help us create some innovative solutions in tourism. LOTRIČ METROLOGY: A CASE STUDY Sensors monitoring environmental parameters in wellbeing: quality of air, temperature, relative humid- Lotrič Metrology originated from a laboratory that ity, air velocity and airflow, noise level, light level, pool was founded in 1923 and was established as a company water quality, as well as pressure difference. in 1992. By monitoring those parameters, we can ensure the This Slovenian based group deals with all kinds of comfort for tourists, residents, employees and visitors. measurements, includeing calibrations, testing, confor- That is also helpful in reducing the risk of human er- mity assessment, metrology solutions, and representa- ror, avoiding damage to cases and for getting reports of tions. continual or discontinued measured conditions in ho- Lotrič Metrology Group develops their business tels, apartments, rooms, wellness and sport centers etc. following the motto “When you think about measure- Once we know the optimal values for wellbeing, we ment, you think about LOTRIČ Metrology” because, can manage the desired conditions in order to provide as William Shakespeare had said, “There is a measure the best enjoyment for our guests. in everything”. We will now address the issue of technical measure- The central points of group development are the qu- ments in tourism, and how such parameters can help us ality system, standardization and certification, as well as save time, improve quality and be innovative. the strategy and co-operation with stakeholders. What are the benefits of Exactum? Under the Slovenian Accreditation, they have done ◆◆ Continuous measuring and access to results 58.162 metrology checks; they cover more than 95% of Exactum wellbeing automatically collects the me- needs in the field of measurement and have 4 patents. asured values from measuring points equipped 126 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

with sensors. A smart sensor hub manages the ucts as well as the activities they undertake in order to system. Remote access control allows us to acce- prevent bad quality, created by internal or external er- ss the collected results in one place and monitor rors. In this case, if we are given information and data measurements in real time. on time, we can provide a timely reaction and prevent ◆◆ Immediate warning and response damage. In the event that the environmental parameters This system allows us to improve the processes by exceed the prescribed limit values, Exactum well- measuring environmental conditions, tourist satisfaction being sends a warning by electronic mail or text and QOL (wellbeing). This could contribute to satisfying message. This will allow us to respond in a timely consumers’ demands and contribute to their satisfacti- manner and take immediate action. on through prevention and constant advancement based ◆◆ Well-ordered database, reporting and archiving on the subjective and objective evaluation and measurement. Exactum wellbeing enables automatic saving, generation of reports, drawing graphs, reviewing of past measurements and critical events. Manual CONCLUSION recording is no longer required. All of the selected data can be exported to .pdf or .xlsx formats Numerous factors have a considerable bearing on and used for analysis. tourists’ perception of a destination, regarding the level When we have the data we can analyze, compare and of their satisfaction, as well as tourists’ willingness to re- manage it for further strategies and development of tour- peat their visit and recommend the destination to pro- ism offer. This actually means that we can control, pre- spective visitors (European Commission, 2002). vent and improve parameters which affect the quality in Measurements can help us to create new innova- tourism. We can also reduce our costs using the Cost of tive views and solutions. Implementing Exactum (smart Quality methodology. sensor hub) to our process is also becoming compatible That involves the use of methodology which enables with PDCA circle, also known as Deming circle (Plan- organizations to determine which resources are being Do-Check-Act). The program allows us to plan, conduct used for activities that prevent low levels of quality. This and monitor our desired valued and conditions, and act applies to organizations that provide services and prod- when necessary.

Figure 4. Monitoring parameters in Exactum software Source: www.exactum.si 127 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

It also analyses the notion of Total Quality Manage- and we could also access it using a mobile application. ment (TQM), as a means of fulfilling the organization’s It is possible to limit the access to the authorized people, goals by enhancing the customer’s experience of the while creating a special application for customers, which product or services provided. It is concerned with the wouldn’t be able to set parameters until they arrived at efficient use of resources, and the level of participation their destination or could only be used during their visit. and satisfaction of human resources in an organization Therefore, we have a complete innovative circle which (European Commission, 2000). It admits that an organi- follows the current trends in information and technical zation can have a wider scope of objectives and should revolution. In order to get the results, it is important achieve them in an integrated way. to keep continuously learning, checking and improving According to the same report, Integrated Quality all the processes. This represents the only way for the Control, as the leading European initiative, aims to organisation to achieve its goals and improve the qual- contribute to the advancement and implementation of ity of services. directions which lead to tourism quality. The quality of tourism service is high provided that the visitor po- REFERENCES sitively rates his/her satisfaction with that service and demand. That is why it is important to discover all the Filipović, J., & Đuric, M. (2009). Fundamentals of Quality.

aspects of customer’s experience, so that the quality co- Belgrade: Faculty of Organizational sciences. uld be provided and related costs minimised. Measuring Filipovic, J., & Đurić, M. (2010). Quality management sys- environmental parameters allows us to ensure that the tem. Belgrade: Faculty of Organizational sciences. tourist is provided with the desired conditions through European Commission. (2002). Using natural and cultural value reports or allowing them to set the desired condi- heritage to develop sustainable tourism in non-traditions on their own. tional tourist destinations. Luxembourg: European Commission. That could become a new comparative advantage Dupeyras, A., & MacCallum, N. (2013). Indicators for for providers of tourism services. It can also help the Measuring Competitiveness in Tourism: A Guidance decision makers with risk management, as mentioned Document. Paris: OCED Publishing. at the beginning of the paper, and the role of technical doi:10.1787/5k47t9q2t923-en measurement. UNIDO. (2006) Role of measurement and calibration in the In further research, we could measure not only the manufacture of products for the global market. Re- environmental parameters and tourist satisfaction and trieved September 1, 2016 from https://www.unido. the effect of smart sensor hub implementation on sat- org/fileadmin/user_media/Publications/Pub_free/ Role_of_measurement_and_calibration.pdf isfaction of user requirements and quality, but also use this sensor for technical measurement of the human Garry, J. R., Lockheed, M., & Cheryl, J. (2005). Technical Measurement. Retrieved September 1, 2016 from body in order to compare the parameters of wellbeing http://www.incose.org/docs/default-source/Pro- and subjective wellbeing of visitors. ductsPublications/technical-measurement-guide- Innovation is at the heart of any successful compa- --dec-2005.pdf?sfvrsn=4 ny’s agenda, so the role that innovation plays in securing Kosar, Lj., & Kosar, N. (2012). Basic aspects of quality in competitiveness is a very important topic. tourism and hospitality. Quaestus Multidiscliplinary The importance of innovation in service activities Research Journal, 3, 27-37. was underestimated for a long time, as innovations in Anntoinette, L.D., & Lepsinger, R. (1999). The Art and Sci- services and tourism were secondary and underfunded. ence of Competency Models. San Francisco: Jossey- Thus, they were excluded from the scope of govern- Bass Pfeiffer. ment interest and action. It is worth noting that the Stanivuković, D. (2000). Human resources - moving spirit discourse altered with the emergence of new informa- of change. Belgrade: JUSK Jugoslavian Association for Standardization and Quality. tion and communication technologies, which have been particularly significant in tourism. The dissemination of The WHOQOL Group. (1998). The World Health Orga- nization Quality of Life Assessment (WHOQOL): new production modes and the resulting organization- development and general psychometric properti- al shockwaves, along with the marketing adjustments es. Social Science and Medicine, 46(12), 1569-1585. entailed, have been a widely explored research topic doi:10.1016/S0277-9536(98)00009-4 (Dupeyras & MacCallum, 2013). Sirgy, M.J. (2001). Handbook of quality of life research: An Another advantage of Exactum smart sensor hub is ethnical marketing perspective. Dordrecht: Kluwer that we have access to the data it measures in real time Academic. 128 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Costanzaa, R. et al. (2007). Quality of life: An approach Frisch, M.B. (2006). Quality of life therapy: A life satisfac- integrating opportunities, human needs and sub- tion approach to positive psychology and cognitive jective well-being. Ecological Economics, 61(2-3), therapy. Hoboken, NJ: John Wiley & Sons 267-276. doi:10.1016/j.ecolecon.2006.02.023 Neal, J.D., Uysal, M., & Sirgy, M.J. (2007). The effect of tourism Gursoy, D., & Rutherford, D. (2004). Host attitudes toward services on travelers’ quality of life. Journal of Travel Re- tourism: An Improved Structural Model. Annals of search, 46(2), 154-163. doi:10.1177/0047287507303977 Tourism Research, 31(3), 495-516. doi:10.1016/j.an- Felce, D., & Perry, J. (1993). Quality of life: A contribution nals.2003.08.008 to its definition and measurement. Cardiff: Univer- Veenhoven, R. (2006). How do we assess how happy we sity of Wales College of Medicine. are? Tenets, implications and tenability of three theo- Pollard, E. L., & Lee, P. D. (2003). Child well-being: A sys- ries. Notre Dame: University of Notre Dame. tematic review of the literature. Social Indicators Re- Galloway, S. (2006). Quality of life and well-being: Meas- search, 61(1), 59-78. doi:10.1023/A:1021284215801 uring the benefits of culture and sport. Edinburgh: O’Donnell, G. (2014).Wellbeing and policy. London: Leg- Scottish Executive Social Research. atum Institute. Cummins, R.A. (1996). The domains of life satisfaction: Møller, V., Huschka, D., & Michalos, A. C. (2008). Barom- An attempt to order chaos. Social Indicators Re- eters of quality of life around the globe: How are we search, 38(3), 303-328. doi:10.1007/BF00292050 doing? Dordrecht: Springer. Diener, E. (2006). Guidelines for national indicators of subjective well-being and Ill-Being. Journal of Hap- piness Studies, 7(4), 397-404.

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Quality in Tourism and Hospitality

Visa application in travel agencies on behalf of the client

Dragana Jovanović Kuprešanin, Abstract: Being a tourist agent in Serbia requires having many special skills and knowl- Gabrijela Lilić edge such as planning and selling transportation, determining destination and travel dates, costs, planning and arranging itineraries, selling tour packages Faculty of Business Studies and Law, and assisting in resolving travel problems for travel agency’s customers. An Belgrade, Serbia average travel agent needs to know how to apply for tourist visas to countries such as the USA, the UK, Canada or Australia, study or work permit on behalf of agency’s clients and customers. Someone may think that this is an easy thing to do, but it actually isn’t. This process very often requires that one needs to understand special terminology used in the instruction guides provided by the consular departments of these countries. A good travel agent is sup- posed to have a very good knowledge of the English language and to be able to understand and use it for specific purposes (ELSP) terminology related to tourism, economics, and very often knowing legal rules and procedures of a certain country is mandatory. This survey is based on a simple questionnaire, which is briefly illustrated in this paper. It explores various aspects linked to the learning of specific terminology in English, especially terms relevant to tourism terminology and visa application concept. We divided this survey into three main sections: essential information about knowledge that one travel agent needs to possess; we asked customers if they trust travel agents when applying for visas; we analyzed some important issues associated with the above-mentioned countries and their visa requirements. Since the process of collecting documents and understanding relevant terminology is rather complex, the authors believe that hiring a travel agent is the best solution. Keywords: travel agent, visa, English Language for Specific Purposes, terminology, tourist agency.

Introduction

In recent years, we have become aware that learning English for Spe- cific Purposes (in further reading-ESP) is mandatory for many jobs related to tourism, legal matters, the European Union, economics etc. A travel agent is one who sells holiday packages and gives travel advice, books business and leisure travels for their customers. His or her role is Correspondence: Dragana Jovanović Kuprešanin to make travel planning easier, and to make sure that prospective clients have the best possible trip. To that end. it is necessary that one is well e-mail: organised and has an eye for details. A good travel agent needs to be [email protected] interested in travelling, planning and organizing and this could be an 130 Sitcon 2016 Doi: 10.15308/Sitcon-2016-130-134 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS ideal job for those who love working with people. Being trust travel agents when they need to apply for a certain a good travel agent requires more than just booking ho- type of visa to countries such as Canada or the USA, or tel/hostels rooms or apartments or making reservation they like to fill in forms by themselves. How do they feel for cruises, itineraries or booking flights, solving health about gathering documents since gathering documents or travel emergency problems or even organizing excur- can be stressful and majority of people do not handle it sions and special tours are also some areas that travel well and many are not so familiar with certain require- agents need to be good at. Knowing how to make a busi- ments provided by the embassy. The travel agent who is ness plan and manage finances requires knowledge of well informed and well-organized and possesses certain accountancy (Heller, 2002, p. 62). Nowadays, we have level of English language knowledge will provide service so many websites that are suitable for people with ba- on a satisfactory level and confusing terms in applica- sic internet skills to book their own flight or hotel or tion forms will not represent problems to him/her. whole travel arrangement and the expected job growth for agents until 2020 is just 10 percent (if we take present QUESTIONS related to the survey situation according to computer literacy of clients) but specializing in a niche market can give the best chance Three main areas are included in this research and for employment for future agents (Christensen, 2016). we distributed them into three areas of questions: Some people are learning fast and for them it is possible “to catch” required knowledge while doing the job at 1) General information about knowledge that one the same time and if one start out on a lower position in travel agent needs to possess; an agency as a ticket agent and work for few years be- 2) We asked customers if they trust travel agents fore applying for a higher or managerial position, some when applying for visas; forms of professional training or enrolment in bachelor 3) We analyzed some important issues related to or master studies could be a huge advantage for cer- the above-mentioned countries and their visa retain applicants compared to other candidates. Being quirements and explained some of the most con- well trained in the field of tourism and having a good fusing English terms in their application forms. knowledge of languages is preferable. The best way to We defined three main aspects: be a good travel agent is to combine an essential educa- Hypothesis 1 tion with good language skills. This job requires being very well informed about the countries in demand and The positive aspect was defined between their level of among of all countries like Canada, the United States, language knowledge and their level of education and the United Kingdom and Australia are those who have how it is recognized in the tourism field the complex way of obtaining visas and clients that you Hypothesis 2 may have very often are not so familiar with their visa There is a positive issue with those clients who trust regime and collecting documents for such purposes can travel agents and those who would fill application be very complicated and very stressful. In that case, it form alone but they will ask the travel agent for help is very important that clients trust the travel agent who with gathering documents needs to be prepared well to give all necessary informa- Hypothesis 3 tion, check all the documentation and suggest if they There is a positive outcome in the fact that hiring need more supporting documents to prove that they are travel agent to help client with gathering documents eligible to apply for the preferred type of visa. and filling application forms can result in minimum risk of being refused for visa for not understanding PURPOSE OF STUDY certain terms

This paper aims to make contribution to better understanding of general knowledge and language skills RESEARCH RESULTS that are essentials for travel agents if they want to provide good service to their clients. This survey is based on When we talk about the skills and knowledge of a simple questionnaire, which is illustrated briefly in this travel agents, we determine that those that one travel paper. It explores various aspects linked to learning ESP agent needs to possess are as follows: It is not mandatory related terminology, especially terms relevant to visa that he/she needs to have bachelor or master’s degree, application concept as a general tourist or visitor. The but nowadays we may see that more preferable is that survey shows some main aspects as to whether people one agent not only possesses a university degree but also 131 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

many other skills related to computer sciences, market- be at least at B1 Level according to CEFR (Common ing, management and psychology. Concerning sales and European Framework References) and these courses are marketing skills, it is recommended that the agent cre- like training-based programs and they usually deal with ates his/hers own client base and be able to grow it by the subjects associated with tourism and hospitality in- attracting new perspective clients and with the use of dustries and there is abundance of literature connected creativity and efficiency to sell travel services to present to this terminology and it enables students to be good clients and to have a personal agenda with full notes in their overall English skills based on communication. of client’s travels so that one can predict future wishes Thanks to that, they are able to use English in their of the clients concerning the countries or places they workplace and can even advance their knowledge and would like to visit and be prepared to suggest new itin- understanding in many different areas, not only tourism eraries and destinations they have not considered yet. and hospitality, but also other similar fields cooperat- Moreover, it is more than recommended for agents not ing with many people from various countries. The agent to be too assertive. Given that they will need to create needs to have the ability to behave well in multicultural personal database via computer, it is more than manda- environment. Well-prepared candidates are able to par- tory to improve their computer literacy. The owner of ticipate in job interviews in English and these lessons are the agency can always hire someone who can help to usually based on the subjects such as tour guiding, Eng- build agency’s own website but if someone chooses to lish skills for dealing with booking flights, making hotel run the private agency and the appropriate maintenance reservations and taking care of customer satisfaction, and updating will help also to market all services and managing customers and staff, writing resumes and ap- since most of clients will try to reach agent via email, it plication letters, organizing marketing and promotion, is recommended that the electronic mails are checked handling bookings and reservations. All this makes one regularly. Buying franchise from big agencies could be agent more competitive in the labor market. a good solution but it requires more money investments All participants in the survey voluntary participated (Gerber, 2010, p. 62). Otherwise, if the agent works for and the responses provided were anonymous. A total an agency, all this may be done by people educated to do number of participants was 36. The citizens of the Re- that except for emails checking, but if someone decided public of Serbia do not need visas for countries in the to be an independent agent, he/she will need to possess European Union and they can stay up to three months, at least the basic knowledge of bookkeeping and soft- so the questionnaire was distributed via Facebook and ware for these purposes and possess good math skills it assessed customers’ opinion about travel agencies and that can help calculating income and expenses. Since whether they trust travel agents when applying for vi- future agency clients may travel all around the world, sas for countries like Canada and the USA. The results the knowledge of geography can be more than useful showed that 76% of all participants were those who as well as having excellent communication skills. Act- mostly travel to Canada, 21% were those traveling to the ing like no self-assertive person when trying to persuade USA, and the rest of the population were those traveling clients about the services of the agency is to any other country, as is illustrated in the graph below. more than recommended. When we talk about being a good psychologist it does not mean that one need to have a di- ploma in the field of psychology, but he/ she needs to be familiar with the human nature and to know how to handle those who are too forceful, insecure or maybe disappointed with certain services. When planning itineraries, it is compulsory to Figure 1. Percentage of people traveling to Canada, USA and other think logically and to act on behalf of cli- countries ents in a very honest and fair way. In order to be able to arrange travels to other countries and to The reasons why people travel to the above-men- understand all the required points, it is important that tioned countries are mostly for visiting family members foreign language fluency is on a higher level (Christens- or friends and many of them are going to work or study en, 2016). English is usually essential in most of cases there. 72% of all participants in this survey said that they and now we have English for Specific Purposes related trust travel agents and they believe that they will fill in to tourism field. To finish one ESP course you need to the visa application forms better than they are able to do 132 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS as applicants. Namely, 24% of all consider themselves as CONCLUSION good with language skills and they will fill in the forms but they would ask for help when gathering the docu- The research results have helped us to analyze some ments, since this can be time consuming and one is not important issues related to the above-mentioned coun- capable to deal alone with that, asking someone who is tries and their visa requirements and attempted to ex- well informed is an advantage and only 4% of all partici- plain some of the most confusing English terms in their pants said that they do not trust travel agents and they application forms. We determined that one travel agent will take all necessary steps alone without any assistance. needs to possess various skills from marketing to ad- These people mostly had bad experience with these em- vance knowledge of the English language associated bassies in the past. with the specific terminology in the field of tourism, law, economics etc. In order to successfully complete one ESP course, one needs to be at least at B1 Level according to CEFR (Common European Framework Refer- ences), and this course usually deals with the references connected to the industries that cover hospitality and tourism through different magazines, books, websites and other useful materials relevant to this terminology. All this can help the students to improve their English skills affiliated with good knowledge of speaking, reading, writing, listening and use of language. Besides that, people trust travel agents and they would let them fill in the application forms and gather documents on behalf of them. Even those who would fill in the forms alone would ask for help when gathering documents. There are many terms related to application forms, but Figure 2. Showing how many people trust travel agents we mentioned those most frequent that lead to misun- derstanding. This research showed that the majority of When applying for a visa to Canada, the USA, the clients will rely on the travel agent and his or her knowl- UK or Australia, applicants need to prepare similar doc- edge and even if they are able to fill certain forms, they uments related to their purpose of travel. Such amount will ask advice from them or ask for help with collecting of documents may confuse someone wishing to ap- papers. More than a few people will do all by themselves ply and this research showed that they will rather ask because they do not trust agents, or we may say they for help than fill that forms by themselves. Terms like are suspicious, probably because of their bad experience eligible, nationality or country of origin, family name, with certain embassy in the past. A travel agent is always surname or given name may confuse one, so 72% of here to give the appropriate advice to clients, be patient participants in this survey agree that they would rather even in stressful situations and when he or she needs trust travel agents than do all alone, which could be con- to deal with difficult people. We hope that this paper sider as a good aspect among clients. Their trust tell us will help travel agents on their path towards building that one travel agent in Serbia is well educated and well successful careers and that they may think about finish- prepared and that the percentage of those who got their ing some bachelor or master’s degree studies since that visas after receiving agency’s assistance are more than could be useful for their further promotion as well as on a satisfactory level. That customers trust travel agents about improving their English language skills. Having even when they are capable of filling those forms alone visas from countries like Canada, the USA, Australia or is confirmed by 24% of all participants in this survey, the UK is considered by these countries as a privilege, while 4% of those who do not travel agents are maybe so an applicant needs to be well-prepared, with correctly those who were refused once by some embassy (CIC, filled forms and information that could help them ob- 2016). In the field of tourism, filling certain forms and tain certain visas. making phone calls is mandatory. Luckily, all updates References related to a visa regime of the given country could be found on the official websites of these embassies (Hard- Heller, R. (2002). Manager’s handbook: Everything you ing, 2009, pp. 38-39). need to know about how business and management work. London: DK Pub. 133 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Christensen, M. (2016). What skills does one need to be an CIC. (2016). Citizenship and Immigration Canada. Re- travel agent? Retrieved August 29, 2016. http://work. trieved August 01, 2016 from http://www.cic.gc.ca/ chron.com/skills-one-need-travel-agent-16110.html english/information/applications/guides/ Gerber, M.E. (2010). Mit o preduzetništvu : zašto većina Harding, K.(2009). Going International: English for Tour- malih privatnih firmi ne uspeva i šta učiniti u vezi sa ism. Oxford: Oxford University Press. tim. Beograd: Čarobna knjiga. Christensen, M. (2016). What Skills Does One Need to Be an Travel Agent? Retrieved August 10, 2016 from http://work.chron.com/skills-one-need-travel- agent-16110.html

134 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Quality in Tourism and Hospitality

The Role of Insurance in Organization of Tourist Travel

Aleksandra Stojaković Abstract: This paper describes the role of insurance in the organization of tourist traveling. Within the framework of sustainable development, two more indicators related to tourism destinations, namely tourist security and satisfaction, should Singidunum University, PhD candidate, be added to these factors. Insurance largely participates in the organization Belgrade, Serbia, of tourist travels because it represents a factor that facilitates planning and Underwriter in DDOR Novi Sad selection of tourism destinations. By surveying stands and perceptions of the insured parties and tourist agencies, the insurance companies conduct research on tourist activities and provide recommendations in order to enhance insurance penetration in tourism, which ensures safe traveling and environment.

Keywords: insurance, tourism, coverage, organization, travel insurance.

Introduciton

In the European Union, tourism represents one of the largest sectors with a 9% share in the consumption and it is also one of five export areas in 83% of countries worldwide, as well as the major source of the foreign currency inflow in 38% countries (Pavlović, 2014). According to the 2013 World Economic Forum report, Serbia is ranked 89th on the list of global travel and tourism competitiveness index which covers 140 countries (WEF TTCI, 2013), while the report for the year 2015 covers almost the same competitive position of Serbia, being ranked 95th on the list of 141 countries (WEF TTCI, 2015). Starting from these facts and bearing in mind the importance of insurance in the economic development, the aim of this study is to explore the role of insurance in tourism through a presentation of different types of insurance in various tourism segments and insurance perception by travel agencies. The paper also explores the conduct of insurance companies to tourist activities and gives recommendations for article improvement of penetration of tourism insurance for the purpose of providing a safer environment for investors. A regards this matter, both travelers and tourism agencies have the common goal, to achieve and maintain the safety and satisfaction of travelers of the planned trip. Insurance as an activity may have a favorable impact on the safety of Correspondence: Aleksandra Stojaković all participants in tourist travel and protect the passengers from potential travel risks. Adverse and disastrous events happen in the world, which e-mail: causes huge damage to international tourism destinations. These sud- [email protected] den and catastrophic accidents have a serious impact on tourism and the 135 Sitcon 2016 Doi: 10.15308/Sitcon-2016-135-142 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

economy of the countries and such adverse events in the other measures). Insurance companies need to ensure tourist business activities have turned into a big problem communication with travel agencies. In communication for continuation and development of this business. In with their clients, who are potential insurers, favoura- this context, safety, aimed at reducing the financial con- ble results can be achieved for insurance market both sequences, plays an important role (Lemarechal et al., in terms of quality and price of services (Gajski, 2013). 2015).The issue of availability of insurance in the tourist The usual way of confronting the risk includes the industry is directed not only towards tourist companies, following options: risk acceptance, risk reduction, risk but also transportation companies. At the same time, transfer and evasion. Risk acceptance occurs in cases the major challenge is the coverage of commercial and when the frequency and range of risk is small and only general liability, i.e. risk coverage and achievement of if the risk consequences can be managed without any insurance coverage profitability. negative impact on the destination, i.e. perception of It may be said that the main objective of conclud- the visitors (Jovanović, 2010). Risk reduction can be ing insurance for tourism companies is based on risk controlled by the change of the risk probability, i.e. management and assessment. Increasing awareness of probability of reducing the effects (e.g. decrease of the the insured parties as passengers, tourism companies fire results in a hotel with the evacuation plans, training and transportation companies is recommended as well of the personnel etc.) and by increasing the flexibility. as participation of the government in increasing the pen- The transfer of risk is used when there are considera- etration of insurance in tourist industry. As it is well- ble consequences (such as injury, damage to property), known, the international tourism agencies are develop- and the risk is transferred, on the whole or partly to the ing and changing from one year to another whereas the insurance companies (Barjaktarović et al., 2013). Risk number of people and participants in the tourism offer evasion occurs if the frequency and size of the risk is is constantly rising (Čekrlija, 2012). high to the extent that the operation is suspended or withdrawn from the tourist offer. In fact, the purpose Results And Discussion of insurance is to compensate or reduce the financial losses and maintain the continuity of tourism activiti- Risk management in tourism es to restore the normal operations and cost-effective manner of doing business. Figure 1 discloses how the Risk is defined as a possibility of occurrence of certa- resources and risks are covered by the concluded insu- in situation that could have an impact on the fulfillment rance policies and how business transactions are cove- of objectives. All the risks have the potential to get out red. This requires subsequent decision making about the of control, which creates the crisis. Therefore, the rati- critical areas in order to remain competitive with other onal approach to risk management is important and it tourist enterprises for more efficient and effective model implies determination of the level of risk exposure that of tourism development management and its activities is acceptable for tourism and clients (Easterbi-Smith et (Popesku, 2015, p. 9). al., 2008), identification of threats for the activity itself and for clients, and the selection of adequate strategies, implementation of these strategies and the appropriate response to extraordinary situations. Risks in tourism may be divided into four basic groups: for the institutional environment of the tourist and complementary companies (e.g. terrorism, violence etc.), unforeseen circumstances in organization of travels (e.g. traffic accidents, lack of protection, earthquakes, floods), passengers as individuals (e.g. visit to dangerous places and similar), physical hazards and risks that threaten the environment (e.g. tourists who are not aware of the natural characteristics of places and destinations they are Figure 1. Factors influencing insurance visiting, failure to take adequate medical and Source: Kaushalya et al. (2014, p. 631) 136 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

In modern tourist offer, there is a growing risk of for the countries with extremely high costs of medical terrorism and political instability, which poses a serious treatment, such as the US. threat to tourism industry. Not only the Arab countries, There are several types of travel insurance depending but also the cities of the European continent, such as on different risks of the insurance contracting parties London, Madrid, Paris (Lemarechal et al., 2015) are in tourism. The most common travel insurance is con- facing the increased number of terrorist attacks and included by passengers themselves i.e tourists departing secure and unstable environments and therefore, these for different international destinations, including as fol- risks have caused enormous damage to tourism on the lows (Konsument, 2012, p. 12): global scale and they represent a challenge in the situa- ◆◆ Travel-health insurance abroad, tion aimed at preserving the business. Travel companies ◆◆ Insurance against accidents on the trip, have suffered considerable losses since the number of ◆◆ Insurance against cancellation of the trip, tourist visitors has been reduced at certain destination, the latest indicators are the frequent terrorist attacks in ◆◆ Luggage insurance on the trip. France (Lemarechal et al., 2015). Private voluntary travel insurance Here we may also refer to natural disasters, which are not routine events, and they require the appropriate reaction and organisation, where the insurance and risk Travel health insurance assessment are related to performance of the tourism activity due to reduced revenues or the number of visi- This insurance is concluded as a voluntary, priva- tors. The primary intention is to reduce the possibility te insurance for an individual or a family planning a of damage and negative impact to avoid risk. However, tourist trip abroad. It includes the insurance coverage the main reason is the threatened survival of tourism abroad for a medical treatment in case of acute illness companies, because many of them have gone bankrupt or an accident. The contracted insurance amount is the or have stopped working altogether following such dis- limit for the costs of the outpatient treatment, medici- asters. Insurance companies can provide valuable as- nes, hospital treatment or a surgery, medically justifi- sistance in the matters of risk management in tourism ed return transport of the injured person or transport (Kaushalya et al., 2014, p. 631). It is important to proof a deceased person. The insurance does not include tect an organization from financial consequences, i.e. the treatment that may be predicted as well as rehabi- losses that reduce business potentials (Popesku, 2015, p. litation or special services. Chronic diseases that alre- 13) and also to find a model for achievement of favour- ady existed prior to the travel or risk-taking sports are able business results and enhanced competitiveness. often explicitly excluded or included in the insurance only to a limited extent (Konsument, 2012, p. 12).The most important thing is to react on time when a medical Types Of Insurance In Tourism Activity problem occurs during the trip and that the insurer is contacted as soon as possible. The number of reported Travel insurance is the insurance aimed at covering claims, based on the data DOOR (2016), the payment of the costs of medical treatment, surgery or death in the damages are ranging from 2 milion RSD in 2013 till 1,5 course of travel. It also includes covering the costs of milion RSD in 2016. the lost luggage, air accidents and other similar losses during a trip, either abroad or in the country. The travel There are often intermediary agencies abroad res- insurance can usually be arranged 24 hours before de- ponsible only for the travel-health insurance and they parture for the specified number of days in travel ar- provide assistance (CORIS, 2016) and advice to the po- rangements (DDOR, 2016), or the policy may cover licyholders at certain destinations on behalf of insurance an unlimited number of trips in a given time period companies. (AXA, 2016), or for instance, several days of travelling a year (DDOR, 2016). Travel health insurance may be Travel insurance against accidents concluded by persons aged 85 and below, and it generally follows the payment of the insurance premium This type of insurance facilitates the financial com- and ends depending on the contracted travel period or pensation after an accident during a trip. The compen- trip completion. The business policy of insurers differs sation is given only in case of the permanent disability, and there is a lower and higher volume of coverage of by means of compensation provided for the rescue and medical costs. Nevertheless, they are generally higher return to home, as well as in case of death, the highest 137 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

ammount covers 30.000 Eur (CORIS, 2016). Small amo- (e.g. robbery, theft) of all items and luggage that is usu- unts are usually envisaged for the coverage of this in- ally carried to a trip for personal purposes. Jewelry, surance and this it can be concluded that private travel watches, furs, technical devices (cameras, film and video insurance is recommended in case of an accident. equipment, lap-top computers, mobile phones) as well as sports devices are covered by this type of insurance only Cancellation of insurance if they are securely stored and personally supervised or used so that their seizure by the third party is not possi- This insurance compensates the costs to a traveler in ble. The insurance company will pay the compensation case he/she is forced to withdraw from travelling under amounting to the present value of the insured items, for certain conditions such as accidents, diseases or death of instance, the official procedure in Air Europa (2009) air- a close family member. This insurance must usually be lines when luggage is delayed more than 24 hours is to concluded simultaneously with the travel reservation. A pay compensation in the amount from 100 to 200 EUR. precondition for this insurance to be covered afterwards Also, the specific provisions apply to the luggage in the is the prevention from travelling suddenly occurred and car or in the camping area. Generally, the insurance in that this could not have been anticipated by the insured tourism may have the positive and negative impacts, party, as in the case of unannounced interruption of em- which are largely conditioned by the planning and or- ployment, the insurance covers part of the amount that ganization of travels to certain destinations (Maksin et was paid to the agency, when their client withdraws from al., 2012). travelling (Helona, 2016; Milenium, 2016; DDOR, 2016). Figure 2 and 3 show the intensity of conclusion of the travel insurance in the summer period with the insurer Luggage insurance DDOR Novi Sad, using the data collected until the end of July 2016 and during the summer seasons in the period Luggage safety is important and this insurance pro- from 2013 to 2015, applying the methods of statistical vides protection in case of damage, destruction or loss analysis of the data of the observed insurance company.

Figure 2. Realization of road assistance & travel insurance policy in the summer season for the period 2013 - 2015 - DDOR Novi Sad (number). Source: DDOR (2016b)

Figure 3. Realization of road assistance & travel insurance policy in May, June, July for the period from 2013 to 2016 - DDOR Novi Sad (number) Source: DDOR (2016b) 138 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Figure 4. Online shop on the website of insurer DDOR Novi Sad Source: http://www.ddor.rs/kupi-online/pzo/

Figure 5. Online shop on the website of insurer Generali Insurance Serbia Source: http://www.generali.rs/active/sr-latin/home/web_osiguranje/travel.html

Drastic increase in the number of sold travel policies organisation of tourist travel more easier and efficient, from the beginning of June to early July is noticeable, in order to prevent extraordinary costs and stressful sit- which indicates strong demand for private insurance uations. Policyholders themselves may conclude travel- during the most intense period of the summer season. health insurance policies by contacting the insurance company directly or through the Internet, although the As of August, the need for this insurance is decreasing. tourist package with additional private medical insur- Contribution to popularization of the travel-health ance is often done through tourist organizations, which insurance can be seen in development of e-insurance in cooperate with certain insurers on behalf of their clients. the direction of online shopping and faster conclusion Figure 4 and 5 show the affordable programs offering of travel insurance by interested users so as to make the online sale of private medical insurances. 139 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Mandatory travel insurance tion to non-execution or incomplete execution of the services provided by the travel program Mandatory insurance by the owners (Milenijum, 2013). of means of transport The same goes for the responsibility of the insured party for damage caused by the travel agency to the Provisions of the Law on Compulsory Insurance in traveler through failure to fully or partially or disor- Traffic (Službeni glasnik RS, 51/2009) regulate manda- derly meet the commitments related to implementa- tory insurance by the owners of the means of transport tion of services covered by the General Terms and the (buses, planes, trains) aimed at covering the damage travel program, in accordance with the law regulating caused to passengers and third parties due to: the tourism sector (Službeni glasnik RS, 84/2015) the ◆◆ death, form of compensation for: ◆◆ bodily injury, 1) claim of the funds paid by passengers based on ◆◆ health problems, the contract on tourist travel which the insured ◆◆ damage to their property, party fails to realize, ◆◆ destruction of or damage to cargo and checked 2) claim of the difference between the contracted in luggage (Paragraf, 2016). price of travel and travel prices in proportion to Such insurance contract can be concluded for a lim- the reduction of non-execution or incomplete ited period of time or for the travelling period and it cov- execution of the services covered by the travel ers the damage caused to passengers, cargo and checked program (Milenijum, 2013). in luggage, as well as the damage due to war and terror- It is obviously important for the owners of tourist ism risks (DDOR, 2016). The share of this group insur- or transport companies to have adequate insurance in ance in the total insurance premium is 0.6% for many all aspects of their business operations in the tourism years (DDOR, 2013; DDOR, 2014; DDOR, 2015). industry, because they are facing challenges of market conditions and specialized risks. Accordingly, the in- Liability insurance of travel agencies in case surance has relevant importance in the field of tourism of insolvency and responsibility in case of the damage business. Making a decision to buy the insurance in or- caused to the traveler (the travel guarantee) ganization of tourist trips depends on external factors (Stojković, 2013), such as the legal and regulatory laws In accordance with the Law on Tourism (Službeni that determine the conditions of insurance, while some glasnik RS, 84/2015), conditions apply for the claims by other types of insurance remain voluntary. policyholders due to its insolvency and liability for the damage caused to passengers. Insolvency is inability to Conclusion pay the mature due debts, which results in the financial blockade of the tour organizer (travel agency) and the amount to be paid is higher than the funds they have at The need for insurance is larger nowadays, especially disposal. for the voluntary insurance because it covers more risks involved in the insurance policy. Therefore, it is impor- On the basis of the foregoing, travel agencies are tant to pose a question as to whether passengers and required to conclude this type of insurance, which pro- travel agencies have insurance and how to provide as- vides security to passengers through the following compensations: sistance in the tourist travel. This paper aims to identify the role of insurance in the tourism industry through 1) the cost of necessary accommodation, meals and the study of attitudes and perceptions of travel agencies, return of travelers from destinations in the coun- to make a survey of the conduct of insurance companies try and abroad to the place of departure; in travel deals and activities, and to make recommen- 2) claim of the funds paid by passengers on the basis dations for improving the penetration of insurance in of the tourist travel contract - which the organ- tourism while ensuring a safer environment for inves- izer fails to realize; tors in tourism and the economy in general (Kordić et 3) claim of the funds paid by passengers in case of al., 2015, p. 35). Although insurance is considered to trip cancellation by the customer, in accordance be one of the vital factors for success of the process of with the general travel conditions; planning and organizing travels, tourist companies do 4) claim of the difference between the contracted not have sufficient knowledge about insurance and they travel price and travel prices lowered in propor- should communicate more with insurance companies, 140 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS which are able to draw their attention to their needs and Kaushalya, H., Karunasena, G., & Amarathunga, D. (2014, requirements as well as to the specific features of tour- September). Role of insurance in post disaster re- ism business. On the other hand, insurance is an eco- covery planning in business Community. Procedia nomic instrument used to avoid a collapse of the tourist Economics and Finance. 18/2014(626-634). 4th In- ternational Conference on Building Resilience. Re- and economic development of the country, because the trieved July 27, 2016, from PubMed database on risks include the whole society.Travel companies should the http://www.sciencedirect.com/science/article/ treat insurance as an important aspect of creating com- pii/S2212567114009848. petitiveness, because they are exposed to the increased Versicherungsverband Österreich. (2012). Potpuno osigu- risk of needs for the capital, which creates an additional rani: stručni pojmovi jednastavno objašnjeni. Retrie- instability. ved July 27, 2016 from http://www.vvo.at/vvo/vvo. Finally, we may say that it is important to monitor nsf/sysPages/x83AE7AFF3B266B91C1257D880044 the progress and improvements of the insurance pene- 728B/$file/Konsument_Spezial_2012_Serbisch.pdf. tration among tourism enterprises (insured parties) and Kordić, N., Živković, R., Stanković, J., & Gajić, J. (2015). Safety and security as factors of tourism destination insurance companies (insurers), through the awareness competitivness. Book of Proceedings: Singidunum programs, public education, conferences, inciting insur- University International Scientific Conference Tourism ance premiums and broader risk coverage, with special Destination Competitiveness, SITCON. doi:10.15308/ emphasis on the tourism industry, due to the large scale sitcon-2015-34-38. business risk with the increased efficiency of insurers. Lemarechal, C., Mang, E., Maniere, E., & Ramic, A. (2015). The terrorist attacks, a problem for the tourism industry in France. TourMag. Retrieved July 25, References 2016 from http://www.tourmag.com/The-terrorist-attacks-a-problem-for-the-tourism-industry- AXA. (2016). Putno osiguranje. Retrieved July 25, 2016 in-France_a71934.html from https://www.axa.rs/za-mene-i-moju-porodi- Maksin, M., Pucar, M., Milijić, S., & Korać, M. (2012). cu/putno-osiguranje/. Održivi razvoj turizma u Evropskoj uniji i Srbiji. Barjaktarović, L., & Jeremić, Lj. (2013). Finansijska kriza Beograd: Institut za arhitekturu i urbanizam Srbije. i upravljanje rizicima osiguranja i bankarstva. Beo- Milenijum osiguranje. (2013). Uslovi osiguranja od odgo- grad: Ekonomski institut. vornosti turističkih agencija za slučaj insolventnosti i odgovornosti za slučaj štete nastale putniku (Garan- Čekrlija, S. (2012). Turizam kao faktor održivog razvoja - cija putovanja). Retrieved July 25, 2016 from http:// opšti pristup odnosu ulaganja i siromaštva. Svarog, www.alturs.rs/wp-content/uploads/2013/01/preuz- 5, 249-257. doi:10.7251/SVR1205249C. mite-dokument-1.pdf. CORIS. (2016). Osiguranje u Srbiji: Sva osiguravajuća Paragraf. (2016). Zakon o obaveznom osiguranju. Re- društva na jednom mestu. Retrieved July 22, 2016, trieved July 25, 2016, from http://www.paragraf.rs/ from http://osiguranje.cu.rs/beograd/coris/. propisi/zakon_o_obaveznom_osiguranju_u_saobra- DDOR Novi Sad (2016). Putno osiguranje. Retrieved July caju.html. 25, 2016, from http://www.ddor.rs/kupi-online/pzo/. Pavlović, S. (2014). Indikatori održivog razvoja za turisti- Easterbi- Smith, M., Torp, R., & Jackson, S. (2008). Rese- stičke destinacije. Svarog, 9, 254-265. doi:10.7251/ arch management. London: Sage Publications. SVR1409254P. Gajski, Z., & Milijević, N. (2013). Budućnost osiguranja Popesku, J., & Pavlović, D. (2015). Adapted integrated je i zdravstveni turizam. Svijet osiguranja, 4/2013. model of destination competitivness. Book of Pro- Retrieved July 21, 2016, from http://www.svijetosi- ceedings: Singidunum University International Sci- guranja.eu/hr/clanak/2013/4/buducnost-osigura- entific Conference Tourism Destination Competiti- nja-je-i-zdravstveni-turizam,322,10665.html veness, SITCON. doi:10.15308/sitcon-2015-9-17 Generali Osiguranje Srbija. (2016). Međunarodno put- Službeni glasnik RS. (2009). Zakon o obaveznom osigura- no osiguranje. Retrieved July 25, 2016, from http:// nju u saobraćaju. Službeni glasnik RS br. 51/2009. www.generali.rs/active/sr-latin/home/web_osigura- Službeni glasnik RS. (2014). Zakon o osiguranju. Službeni nje/travel.html. glasnik RS br. 55/04, 70/04, 61/05, 85/05, 101/07, Helona. (2016). Osiguranje od otkaza putovanja. Retrie- 107/09, 99/11, 119/12, 139/14. ved July 27, 2016 from http://www.helona.rs/osigu- Službeni glasnik RS. (2015). Zakon o turizmu. Službeni ranje-od-otkaza/. glasnik RS br. 36/2009, 88/2010, 99/2011, 93/2012, Jovanović, V., & Delić, U. (2010). 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Stojković, M. (2013). Organizacija rada turističkih agen- World Economic Forum. (2015). The Travel and Tourism cija. Retrieved July 25, 2016 from http://www.turi- Competitiveness Report 2015. Retrieved July 22, 2016 zamiputovanja.com/organizacija-rada-turistickih- from http://ep00.epimg.net/descargables/2015/05/06/ agencija/ f2c1e517ce56a6453171d3a9d1b1da05.pdf Šipovac, Z. (2014). Ugovor o putnom zdravstvenom osiguranju. Srpska pravna misao, 20(47), 285-305. doi:10.7251/SPM1447285S. World Economic Forum. (2013). The Travel and Touri- sm Competitiveness Report 2013. Retrieved July 22, 2016 from http://www3.weforum.org/docs/WEF_ TT_Competitiveness_Report_2013.pdf.

142 Quality in Tourism and Hospitality SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Resources as a Basis for Achieving Quality and Destination Competitiveness

Human resources as a factor of competitiveness and quality in the hospitality industry

Iva Bulatović , Abstract: Large and successful companies are aware of the importance of the human Silvana Đurašević, factor. Unfortunately, there are those much smaller ones and not so success- Ana Stranjančević ful, where profit is the only vision, mission and goal. Many did not think and still do not think about the ways that will provide them benefits, and misuse of one’s knowledge and skills has never been valued, nor it will be. The loss of employee loyalty is the result of non-compliance with the employee in- Mediterranean University, dividuality, their wishes and needs, which is particularly prominent in the Montenegro Tourism School, services sector. This paper deals with human resources and their function in Podgorica, Montenegro the hotel industry of Montenegro. The aim of the paper is to highlight the importance of human resources for tourism development of Montenegro, the importance of investing in this type of capital in order to ensure quality and destination competitiveness. The model of individual performance was used herein, which was adapted and amended with the aim to be used in the analysis of effectiveness and competitiveness of hotel companies.

Keywords: human resources, destination competitiveness, tourism, hospitality.

Introduction

It is generally well-known that a hotel product is composed of services, and that its features must not be forgotten whatsoever. As a reminder, we will explain the characteristics of services, and accordingly, hotel products. Services, unlike products cannot be seen, touched, tried, smelled, or heard before purchasing. A clerk at the sales department in a hotel cannot take a room with him as a response to a request for booking. Services are intangible, which represents a significant barrier to their use, because before consumption and purchase, the sale must be based on the experience of consuming which is well presented. Services can be produced and consumed at the same time and in the presence of “producers” and consumers. Indivisibility of services also means that the constituent part of a hotel product, that is, service, is its very consumer, that is, travel consumer. Travel consumer significantly affects production of adequate services, by means of selecting different sets of services during their stay in the hotel, Correspondence: Iva Bulatović or meals and drinks at the restaurant, ways of serving etc. Services cannot be stored. Unfilled hotel capacity cannot be made good or excellent by e-mail: occupancy in the next period. Demand and supply compatibility is crucial [email protected] for the effective services utilisation of service capacities. Service variability 143 Sitcon 2016 Doi: 10.15308/Sitcon-2016-143-149 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

is conditioned by the fact that the subjective factor, that isfaction, regardless of the technical, organizational and is, human factor, is crucial for the quality of implemen- technological segments of service quality (Kotler, Bowen, tation. The service is unique, like a role of an actor on Makens, 2014). Thus, the focus of quality is transferred stage, it can be at a high level of quality that satisfies to service performers, catering staff and hotel manage- a user, but all the elements in the process of provision ment. It is important to remember that the quality is de- and consumption cannot happen again. Simultaneity of termined by labor standards (regulations that determine consumption and provision of services through interac- the quality elements of staff in a hotel: knowledge, skills, tion of both sides creates a unique atmosphere (Kotler experience, appearance, behavior...) (Holjevac, 1998). et al., 2014). This means that service providers must have certain char- It is these particular qualities of services, and there- acteristics: education (by degree and profile), quality of fore the hotel product, that indicate the importance of work, general culture, business culture, natural or learned human factor in the process of providing services and, kindness, stable personality, courtesy, confidentiality, in- of course, when selling hotel products. The theory and tegrity, communication, patience, personal charm, rela- practice have shown that the following paragraphs are tively good physical appearance (Curuvija, 2007). correct: Literature review ◆◆ Hotel industry resulted in order to fulfill desires, demands and needs of tourists/guests. Productivity plays a key role in determining the living ◆◆ Guest pays both to you and me. standard of each country i.e. the standard of living of a ◆◆ The measure of quality of a hotel product is the country depends on its ability to produce goods and ser- number of satisfied guests. vices. Productivity can be defined as the amount of goods ◆◆ The so-called. “Buzz marketing” - marketing and services that an employee produces for each hour of “word of mouth” is still the most effective (Ho- work (i.e. the amount one produces within a given unit ljevac, 1998). of time) and it is directly determined by the factors of Now the question arises: What/whom does the sat- production such as physical capital, natural resources, isfaction of guests depend on, and therefore their re- technological knowledge and human capital. For the arrival, arrival of their friends, good advertising, good purposes of this paper, we will specifically deal with hu- reputation of the hotel, increase in profit? The level of man resources and human capital. One can find different competitiveness of a hotel and quality of hotel product? names for the concept of human capital in the literature: It mostly depends on the hotel staff. Especially now- social capital (Payne et al., 2011; McFadyen & Cannella, adays, when competition is getting stronger each day, 2004), human capital (Becker, 1993), intellectual capi- when luxuriously equipped hotel facilities are not a rar- tal (Stewart, 1997). Human capital can be explained as ity, man plays the major role and holds all “strings” in an economic term for knowledge and skills that work- their hands, since a guest in the 21st century is sophisti- ers acquire through education, training and experience cated and requires the “right things”, asks for EXPERI- (Mankju, 2006). Human resources and human capital ENCE! And this is one of the leading trends cited by the are increasingly gaining in importance in the sphere of UNWTO - Change from service to experience! Memora- business and beyond. Čačić (2010) points out that the ble moments cannot be provided by gilded dining ac- material and human capital make the property of a com- cessories and silk sheets, a guest can have it in another pany. This is particularly evident in the service sector in hotel as well, what a guest remembers is the staff, i.e. which the man assumes the most important role. their attitude, their behavior, kindness or unkindness. It is well-known that in all areas of social and eco- It should be noted that the largest cost for a hotel nomic development, human resources represent the ba- company is when a guest notices and charges a mistake. sis of successful business, apart from having a significant However, many mistakes (technical deficiencies or de- role. According to Bakić (2002), employee education, fects caused by accident) may be replaced by a warm development and training are the vital components of smile and an apology by the providers of services, gift or maintaining the competitiveness in service sector. This discount, in our language a fixed phrase “on the house”, implies that investing in training and additional educa- while, on the other side, high-category hotels cannot tion of staff in service sector is necessary, especially in replace unkind and discourteous staff. The guest does hotel industry. not forgive or forget such mistakes. We conclude that Мarchante and Ortega (2012) state that a mismatch the psycho-physical characteristics of service providers between education levels required for a job and educa- can significantly cause consumer satisfaction or dissat- tion levels of employees can explain differences in the 144 Resources as a Basis for Achieving Quality and Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS hotel staff productivity. Much more efficient are tho- functions, and willingness to communicate with vari- se employees who are suitably educated, unlike those ous stakeholders with the aim to improve performance. who are not, while at the same time; overeducated em- The evolution of the role of employees is a conse- ployees are more efficient than those undereducated quence of business model and organization of business (Мarchante & Ortega, 2012). The appropriate structu- processes (Mankju, 2006, p. 477). In the 21st century, re of employee education level according to their job human capital has become the greatest wealth of an or- requirements, definitely leads to higher level of labor ganization. productivity and the overall business success of hotel industry organizations. Methodology Apart from the appropriate level of education, the productivity and competitiveness of hotel companies For the purpose of this article, we have conducted largely depend on special skills of their employees. Shel- the study based on the available secondary data includ- don and Gee (1987) identified the most important skills ing the applicable statistical data, certain analysis and re- so that hotel staffcould be provided with certain train- ports done by relevant organizations, and vital national ings. Employees and employers agreed on the statement strategies dealing with human resources in the tourism that human relations, communications, and courtesy field. In order to carry out the research, we used sev- skills are of the greatest importance. However, there eral scientific methods: methods of analysis, deduction was no agreement on the skills dealing with salesman- and induction. Based on Literature review, we made the ship, operations and computer skills, while at the same main conclusions that enable us to identify the most im- time the lowest ranked were knowledge of local people portant models for analyzing the performances of hotel and their culture (Sheldon & Gee, 1987). Since men- enterprises. tioned knowledge and skills are the basis for successful For the purpose of this article, the Model of individu- development in contemporary business environment, al performance was used. Based on our analysis and the we can say that the knowledge of foreign languages and main conclusions, we have adapted and amended this information and communication technology is only the model. We created such a model for a detailed analysis precondition for engagement in the hotel industry. of hotel companies, especially those related to their ef- We can state with certainty that human resources as fectiveness and competitiveness. the bearers of human capital are the source of competi- It has been said that human resources and their par- tiveness in the market. Thus, Podolny & Baron (1997) ticular character come to the fore in the service industry, argue that the concept of social capital is an important such as hotel industry. To stress the importance and the factor that can affect the competitive advantage and per- role of human resources in the hotel industry and their formance of a company. Furthermore, the role and im- impact on the quality and competitiveness of a hotel portance of human resources in business environment product, we shall present the Model of individual per- have influenced the reforms of traditional organizations, formance. so nowadays we may more frequently come across the so-called “knowledge organization”. The learning or- Business satisfaction, employee loyalty to the com- ganization concept is based on the constant learning of pany, productivity, quality and service depend on an in- individuals, employees, so the organization itself learns dividual, his/her knowledge and skills, motivation and and makes progress. This is a two-way process. Indi- support one receives from the company, and nature of viduals and their knowledge and skills can improve the the job. productivity and competitiveness of an organization, These variables are used to measure the effectiveness but also an organization can do something so that in- of operations in an organization. Additionally, we argue dividuals improve their individual skills and acquire that this model can be useful in measuring the competi- new knowledge. The learning organization expresses its tiveness of an organization. In fact, quality is a measure ability to produce and acquire new knowledge, new con- of competitiveness, but we said that the quality largely, if cepts, and successfully adapt them to the business envi- not entirely, depends on the human factor. The present ronment and its intentions. Today, in times of strong model can be applied in the hotel industry of any coun- general uncertainty, it is very important to create a flex- try, including Montenegro. The category “Individual” as ible organization that can adapt to new changes, but a subjective labor factor is essential to the effectiveness this is only feasible if it has quality resources, and rich and efficiency of the entire work process in a hotel, while human capital. The learning organization encourages category “Work” appears as an objectively necessary teamwork, communication between different business supporting labor factor. From the aspect of possibility 145 Resources as a Basis for Achieving Quality and Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Chart 1. Model of individual/organizational performance Source: Adapted according to Mathis, Jacson (2008, p. 81)

of action on certain labor factors to increase business within a single sector, i.e. the level of management in efficiency and competitiveness, the subjective labor fac- which they are engaged. Thus, for example, operational tors can be influenced more than the objective ones. management mainly needs technical knowledge and knowledge about people. As we climb to the top, the Category – Individual productivity mentioned is less needed, while conceptual knowledge comes to the fore. It is similar with the skills that em- A man is the trump, a major competitive advantage ployees need to master at different levels. Since service in hotel industry, and therefore deserves our dedica- provider is inseparable from the user in the hotel indus- tion and analysis of factors affecting his productivity. try, communication skills are also crucial for successful Namely, the productivity of an individual depends on business and cooperation and should be mastered by all three categories: employees of a hotel. On the other hand, as is the case ◆◆ Knowledge and skills with the communication skills, employees are required to know at least one foreign language. In order to prove ◆◆ Motivation and effort that statement, we will use the results of the survey on ◆◆ Support they receive from the organization the labor market, qualification and education needs in In the next chapter, we will give a brief analysis of tourism and hotel industry conducted by the Employ- the individual productivity of human resources in the ment Agency of Montenegro in 2008. hotel industry of Montenegro. According to this survey, employees in the hotel industry of Montenegro mostly lack knowledge of foreign Results and discussion languages, communication skills, as well as creativity, which means that employees in this sector do not fulfill The tourism development strategy in Montenegro by the basic conditions required for successful operations. 2020 (DEG, GTZ, MTZZS, 2008) allocates a decisive role On the other hand, employee computer illiteracy in this in tourism development to human capital. It particu- area is also worrying. These shortcomings are inexcus- larly highlights the importance of staff in the hotel and able for a country that wants to be a tourism destination restaurant industry, travel agencies and numerous or- (see Chart no. 1). If one component within the category ganizations in the sphere of services at the local, regional Individual does not work, it will affect the entire cat- level, and at the country level as a whole. Knowledge egory, and therefore, all other variables used to measure and skills required of employees in the hotel industry the effectiveness of operations, as well as the competi- vary from sector to sector, the functions performed tiveness of a hotel product. 146 Resources as a Basis for Achieving Quality and Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

In other words, the staff in the hotel industry of Mon- portant than knowledge and skills, as well as employee tenegro does not have necessary knowledge and skills, motivation. On the contrary, job motivation, and will- and therefore reduce the effectiveness and efficiency of ingness to acquire new knowledge and skills, as well as Montenegrin hotel industry, as well as competitiveness the achievement of better performance and logical and of destinations in the tourism market. We can conclude greater effectiveness of the company, depends on the that the situation has meliorated since the time of the support an employee receives in the workplace. Em- survey, but the problem of employee competence in the ployee support by the management is closely connected hotel industry comes to the fore. In addition, there is a to the motivators discussed in the previous section. question of staff motivation in the Montenegrin hotel Employees receive support from the company thro- industry. ugh various forms of training and development rewar- If we start from the thesis that the customer is satisfied ds that await them if the performance is satisfactory, if the service provider is satisfied, that a satisfied employee the equipment they get to use and fair collaboration is employee by the worker, it can be concluded that em- with colleagues. It is very important, especially when ployee motivation in a typical service activity, such as the working in a hotel that employees always have in mind hotel industry, is a factor of business success of a hotel. that their efforts are rewarded, that their work is not In Montenegro, a guest has an opportunity to en- in vain and that they can further progress and develop counter “dissatisfied” service providers on a daily basis, their skills and knowledge. and thus their inappropriate behavior, which is quite ir- It is also important that each employee is made aware ritating, creates a desire to change the place of residence. of the objectives of the company they work for, as well The question imposes as to what causes such emotional as that their suggestions and proposals, if justified, will state. The answer probably lies in motivators (things that encounter support. What is particularly stimulating for encourage an individual to act, or the means by which all employees in a hotel is good communication with as- the conflicting needs can be reconciled, or emphasize a sociates/colleagues/bosses/managers, which will be dis- need in the way that it has been awarded priority over cussed afterwards. In this way, an employee feels more other needs). They are the kind of instruments which valuable, which is encouraging, and motivates them to aim to strengthen the desire for realization, thus achiev- do their best to achieve more favorable results, which ing satisfaction, and the means by which it can influence would result in the enhanced efficiency and effective- human conduct. The most commonly used motivators ness of hotel businesses, higher employee satisfaction, are: money, job security, assigning interesting tasks, pub- and thus higher customer satisfaction. lic giving of credits, the possibility of training, advance- In addition to the so-called moral support that em- ment opportunities, participation in decision-making, the ployees expect from their company, we include means quality of the working environment, self-affirmation and of work that are given to employees, as well as all types the like (Cetinski, 2006). of training, development and education, so as to en- Motivators bring about a new dilemma: whether hance the overall employee performances (Mathis & domestic hoteliers are aware of the importance of em- Jacson, 2008). ployee motivation for the effectiveness and efficiency of Education and training play a very important role operations and, if so, which motivators are used most in development of human resources which are at dis- frequently? Unfortunately, local hoteliers (mostly) strive posal of the hotel industry of Montenegro. Training of for profit as a primary objective. The goal is not profit, personnel in the hotel industry includes two levels, high as it is a means to get to the finish line. The ultimate goal school and university. Secondary vocational schools for are satisfied employees. different employee profiles the hotel industry are mostly The creators of modern management care about being established in urban centers or centers of the tour- employee motivation in the hotel industry of Montene- ism region, which generates the staff trained for specific gro, so it is no surprise that the best business is in hotels jobs of lower level of complexity, such as waiters, maids owned by the renowned hotel companies which are not etc. (Mathis & Jacson, 2008). Upon graduating from vo- headquartered in Montenegro, but in the countries cor- cational schools, most of them opt for some faculties. porate headquarters, which, by all criteria, are far ahead In recent years, there has been a large number of ac- of Montenegro. credited programs for tourism and hotel management, The third element of category Individual (chart no.1) but these are mainly academic programs, not applied. states that the company provides necessary support to Many expect managerial positions after graduation de- employees. It can be said that this element is not less im- spite lacking any prior experience. While some higher 147 Resources as a Basis for Achieving Quality and Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

education institutions have tried to offer applied stud- Namely, the modified model of individual/organi- ies in tourism and hotel industry, there has been non zational performance points to necessity of engagement interest in enrollment. On the other hand, experience of human resource management which should con- and the labor market show that they need highly com- stantly monitor employee satisfaction, and support all petent staff in the operational and intermediate levels elements motivating the individual and ensuring better of the organization. So, the key is to educate and influ- performance, business efficiency and competitive posi- ence population concerning the needs for trained and tion in the market. creative staff in the hotel industry. It is necessary to replace the awareness on ”second-class jobs,” as is often Conclusion thought about working in the hotel industry, with the awareness that modern hotel industry requires knowl- In order to ensure a higher level of effectiveness and edgeable and creative staff, with all necessary compe- efficiency of the hospitality industry, and to increase the tencies and expertise. competitiveness of Montenegro as a tourism destination on the global tourism market, it is essential that Proposed model the hotel staff possesses necessary knowledge and skills. As regards the improvement of the existing employee Based on the above-mentioned, we can state that structure in tourism industry, the Human Resources the success of a hotel, quality of a hotel product and Development Strategy in the Tourism Sector in Mon- its competitiveness depend on guest satisfaction, while tenegro (Ministarstvo turizma i zaštite životne sredine, guest satisfaction heavily relies on employee satisfac- 2007) highlights the main recommendations for achiev- tion. Therefore, it is possible to conclude that the suc- ing that goal. It would be necessary to improve insti- cess of the hotel, quality of a hotel product and its com- tutional, organizational and regulatory environment, petitiveness depend on employee satisfaction. Employee develop better educational facilities and improve qualifi- satisfaction depends on employee motivation, knowl- cation service providers, develop the qualification offers edge and skills, working conditions, working climate, in compliance with the market needs and demands, and support one receives from the company, teamwork, to improve the institutions for educating future teachers and good communication between employees etc. All and managers (“Capacity Development”). Those recom- of the specified depends on management. Accordingly, mendations should be the basis for priority spheres of we can adapt the model proposed by Mathis and Jac- activity, both for formal and informal education, but son and add one category. The amended Model of indi- could the important guidelines for the hotel manage- vidual/organizational performance is illustrated below: ment as well, since the hotel as an organization should

Chart 2. Model of individual/organizational performance Source: Adapted according to Mathis and Jacson (2008, p. 81). 148 Resources as a Basis for Achieving Quality and Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS also provide its employees with different kinds of train- Cetinski, V. (2006). Projektni menadžment. Opatija: Fa- ings and specializations. On the other hand, employee kultet za turizam i hotelijerstvo. motivation in service sector has a very important role in Ćuruvija, I. (2007). Kvalitet usluga turističkih vodiča. Beo- their engagement and commitment within the organiza- grad: Zadužbina Andrejević. tion. DEG, GTZ, CREATOP (2008). Strategija razvoja turizma Based on the study conducted, we conclude that for u Crnoj Gori do 2020. godine. Podgorica: Ministar- the sake of effective and efficient business, it is necessary stvo turizma i zaštite životne sredine. to manage human resources in each organization, espe- Kotler, Ph., Bowen, J., & Makens, J. (2014). Marketing cially in hotel enterprises. However, this does not mean for hospitality and tourism. Upper Saddle River, NJ: Prentice Hall Inc. that they are not managed properly now, but it primarily refers to quality human resources management, i.e. exist- Mankju, G. (2006). Principi mikroekonomije. Beograd: Publikum. ence of responsible management. Responsible management is quite familiar with all aspects of the production Marchante, A.J., & Ortega, B. (2012). Human Capital and Labour Productivity: A Study for the Hotel In- in a hotel, and therefore, the importance of human capi- dustry. Cornell Hospitality Quarterly, 53(1), 20-30. tal for achieving a competitive advantage in the market. doi:10.1177/1938965511427698 Quality management of hotel organizations in Mon- Mathis, R., & Jacson, J. (2008). Human resource manage- tenegro is often lacking, not to speak of human resource ment. USA: Thomson South-Western. management. Based on the above-stated, it can be con- McFadyen, M.A., & Cannella, A.A. (2004). Social capital cluded that the main reason of employee dissatisfaction and knowledge creation: Diminishing returns of in the hotel industry in Montenegro is poor manage- the number and strength of exchange relationships. ment, especially lack of management or inadequate man- Academy of Management Journal, 47(5), 735-746. agement of human resources. Certainly, there are some Ministarstvo tuizma i zaštite životne sredine Crne Gore companies in Montenegro that are a bright example in (2007). Strategija razvoja ljudskih resursa u sektoru this respect. Owing to high-quality education institu- turizma u Crnoj Gori / The Human Resources De- tions, new generations prefer the hotel industry as an velopment Strategy in the Tourism Sector in Monte- area to express their creativity, make contribution, build negro. Podgorica: The Government Printing Office. a successful career and bring down all the job prejudices Payne, G.T., Moore, C.B., Griffis, S.E., & Autry, C.W. in the hotel industry. (2011). Multilevel Challenges and Opportunities in Social Capital Research. Journal of Management, References 37(2), 491-520. doi:10.1177/0149206310372413 Podolny, J.M., & Baron, J.N. (1997). Resources and rela- Avelini, H.I. (1998). Kontroling: upravljanje poslovnim tionships: social networks and mobility in the work- rezultatom. Opatija: Fakultet za turizam i hotelijer- place. American Sociological Review, 62(5), 673-693. stvo. Sheldon, P. J., & Gee, C.Y. (1987). Training needs assessment Bakić, O. (2002). Marketing menadžment turističke desti- in the travel industry. Annals of Tourism Research, nacije. Beograd: Ekonomski fakultet. 14(2), 173-182. doi:10.1016/0160-7383(87)90083-1 Becker, G.S. (1993). Human Capital: A Theoretical and Stewart, T.A. (2010). Intellectual Capital: The New Wealth of Empirical Analysis with Special Reference to Educa- Organizations. New York: Crown Publishing Group. tion. Chicago: University of Chicago Press. Zavod za zapošljavanje Crne Gore (2008). Analiza defici- Čačić, K. (2010). Poslovanje hotelskih preduzeća. Beograd: tarnih zanimanja u Crnoj Gori. Podgorica: Zavod za Univerzitet Singidunum. zapošljavanje Crne Gore.

149 Resources as a Basis for Achieving Quality and Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Resources as a Basis for Achieving Quality and Destination Competitiveness

Gastronomy and Tourism Destination Competitiveness

Slavka Drašković Abstract: Although gastronomy as a science developed in close connection with tourism, research in the field of gastronomic tourism is quite rare. However, due to the increasing popularity of this type of tourism, one of the growing trends Singidunum University, is precisely the research on food. Gastronomic tourism is gaining more atten- Belgrade, Serbia tion each year, both in the scientific community and among users of tourism services. The purpose of this study is to determine the importance of gastronomic tourism for tourism destination competitiveness. The author argues that gastronomic tourism is one of the answers to the demands of new forms of tourism demand and that the culture, tradition and identity of the local community are an integral part of this kind of tourism. The study confirms the tendency of tourists to highly value local cultural values. Therefore, in developing destination competitiveness, one must take into account the global and the local component of gastronomic products.

Keywords: gastronomic tourism, food, culture, destination competitiveness.

Introduction

Due to the specificity of food as a research subject, gastronomy uses research of other sciences. Today, it is impossible to explore the food only within a single discipline, but it is necessary to assume a multidisciplinary and holistic approach. Research in the tourism context is valuable for gastronomy as a relatively young discipline. For their part, this research must also take into account the research of other sciences, such as an- thropology, history, and others. In this context, the paper establishes the framework for this and future research on gastronomic tourism and its impact on destination competitiveness. This framework includes not only tourist trips and tourist preferences, but also the role of culture, customs, and food symbolism and other characteristics of the local identity of a destination.

TREND OF GROWTH

Correspondence: Slavka Drašković Research in the field of gastronomic tourism is rare, and was primarily focused on the wine at the beginning, although these “oenotourists” are e-mail: not necessarily those who engage in other, non-oenological gastronomic [email protected] activities (Mak et al., 2012). Gastronomic tourism is a phenomenon in the 150 Sitcon 2016 Doi: 10.15308/Sitcon-2016-150-154 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS making, because, among other things, more than a third tory, tradition, culture and religion of the site, makes of tourist spending goes to food (Quan & Wang, 2004). it possible to promote destinations through the food. This should not be surprising as the cuisine and food are Thus, many destinations have started to advertise for of vital importance for the quality of vacation. Research its unique local cuisine, its ingredients and specialties. has shown that eating in restaurants is the second most What is good is that the gastronomy is the competi- popular activity of tourists who visit the United States tive potential of each destination, because each has its and the number one of free-time activities for American own, ever-present specificity of local cuisine. It is only travelers when they visit other countries (WTO 2102). important for it to be recognized and smartly packaged According to the World Food Travel Association as a tourism product. (WFTA), the growing demand for gastronomic ingre- Gastronomic tourism is particularly important for dients while traveling is the result of several factors. rural communities which, due to rapid urbanization, The following are extracted from these factors: rapid have a huge problem with economic growth. However, growth of media and social media that deal with food; when it comes to food, these communities have a com- a farm-to-table movement among large travel brands parative advantage over others. First, they themselves and the increasing offer of high-profile events that pro- produce food on their own land. This food is usually mote local cuisine. The World Tourism Organization less polluted and healthier than the one produced en also reports that gastronomic tourism is becoming one masse and with abundant fertilization. Second, these of the leading trends with the high growth rate in all communities keep the longest tradition and culture of a countries, and foresees that this growth rate will still region, and when it comes to food they keep the old rec- increase (WTO, 2012) ipes and traditional ways of preparing food. Tourism, and primarily gastronomic tourism, enables increase FOOD, CULTURE of income of the local community and employment to more people. There are new jobs such as local guides AND DESTINATION COMPETITIVENESS who visit the vineyards and local wine cellars (vineyard tour guides) or local chefs with tourists, and the food One of the definitions of gastronomic tourism de- production and consumption in the agricultural sector fines it as experiential journey into gastronomic regions and service sectors is also encouraged. for recreation and entertainment, including visits to Food carries a symbolic meaning and has a social food producers, gastronomic festivals, food fairs, cook- and class component (Fox, 2015). In the context of ing shows and demonstrations, tasting quality food tourism, eating also has a ‘symbolic’ meaning. It is an products or any tourist activity related to food (Hall & indicator of social differences (Chang et al., 2011), and Sharples, 2003). These experiential trips are in connec- a symbol of our identity, the one by which we and our tion with certain lifestyle that involves experimentation, culture and community differ from others, their cul- learning from different cultures, gaining knowledge and ture and community (Fox, 2015; Chang et al., 2011). understanding of local products, history, culture and Several studies have shown that the regional food and properties related to the tourism product. cuisine of a destination can be a powerful tool in their Modern tourists are more experienced, have more differentiation compared to other destinations, in terms money for the trip, and are willing to pay more to obtain of large global competition in tourism, as food contains new knowledge and unique experience. Contemporary a source of characters (Long, 2004; Frochot, 2003). Al- forms of tourism that are developed in response to these though it is expected that globalization leads to the in- changes in demand, offer them the opportunity to avoid creased homogenization, this is not the case with gas- the daily routine and sail into a new world, new culture, tronomic tourism (Cavicchi & Stancova 2016). This is new aroma and tastes. The gastronomic experience is an very important when it comes to the competitiveness integral part of the new experiences that are required. of the destination and confirms the tendency of tour- Modern tourists are going to popular destinations to en- ists to highly value local cultural values. Therefore, in joy the specific recipes and cuisine of this region, which developing destination competitiveness, it is necessary makes gastronomy the central part of the tourist experi- to take care of this “glocalization” (global + local) and ence (WTO, 2012). development of local gastronomic products (Cavicchi & The food is the key feature of the culture of a na- Stanco 2016; Chang et al., 2011). tion and the region. The cuisine reflects the history and Globalization is impossible if it is not localized, and specificity of a given place. Its deep connection with his- it is one of the great paradoxes of modern globalization 151 Resources as a Basis for Achieving Quality and Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

to the extent to which localization has become signifi- tourist expects holistic approach to vacation, wel- cant (Cavicchi & Stanco 2016; Hall & Sharples, 2003). fare and well-being as well as the specific lifestyle, The trend in gastronomic tourism goes towards and therefore fresher, healthier food choices in destination sustainability, further interest in local cul- hotels, restaurants, airports etc. Also, these tour- ture and tradition and authenticity of gastronomic exists take more tours with packages that include perience, more expenses on food and drink, including culinary adventures. (WTO, 2015) gastronomic offers in combination with other forms of Gastronomy has the ability to increase the tourism tourism. Gastronomic tourism shows the following ten- sustainability, strengthen the economy of a certain dencies (WTO 2015): place, make the authenticity of the region and facilitate the creation of hospitable environment (du Rand ◆◆ environmental sensitivity and sustainability – Tour- et al., 2003). ists are increasingly concerned about waste and packaging that remains after them, and recycle Tourism, destination image while traveling. and gastronomic tourism experience ◆◆ local cuisine is still in trend – There is continued interest of tourists in the original local food and The food could have mutiples roles in destination drink. More and more types of local are part of branding and setting: the tourism offer. These products are also in- 1. Food is part of the marketing mix related to a creasingly represented at the airport terminals, destination because it helps in experiencing a train stations etc. certain place and allows you to literally taste the ◆◆ willingness to pay more – Tourists spend on food destination, coming directly into contact with the and drink, in the context of the specific experi- local culture; ence, they are willing to pay more than ever be- 2. Given that we eat two to three times a day, gas- fore. tronomy is one aspect of the culture with which ◆◆ the search for new knowledge – Tourists are be- tourists usually come into contact. They try out coming more educated and are searching for the local culture. something new and different. New knowledge 3. Dietary habits are differences that immediately and experience is required when it comes to food catch the eye: the time when people eat, how they and drink, while looking for the new ingredients eat and what they eat, everything becomes imme- and products. diately different at the accession of a new culture. ◆◆ authenticity - Whether the travelers explore the 4. Food allows direct contact with the landscape, country, region, city, or their environment, they because tourists can recognize its origin (Cavic- want to experience a destination through its in- chi & Stancova, 2016). herent food. Chang and his colleagues conducted the research ◆◆ peer to peer experience when it comes to food – This which outlined 15 characteristics affecting the assess- concept has been promoted around the world by ment of gastronomic experience at a destination.They new online platform and enthusiastic food lovers are qualified in 6 categories, namely: tourists’ own food around the world. Popular services offer online culture, the contextual factor of dining experience, vari- start- ups as Eat With, Feastly, MealSharing and ety and diversity of food, perception of the destination, CookApp, but Airbnb also included peer-to-peer service encounter, and tour guide’s performance (Chang dining in its offer. Online platforms link chefs et al., 2011, p. 311) who want to host dinner in their own homes to On the UNESCO’s list of intangible cultural her- strangers who want a home-cooked meal. This itage, food has received the status of a true common type of experience also includes symbolic, cultural cultural heritage. In this way, it gradually replaces the and social component of food because it contains brand of geographic location (Williams et al., 2014) the experience of food sharing, care, hospitality, and becomes one of the most important components friendship, dating and mixing with different so- in the selection of a particular destination (Hall et al., cial and cultural levels and more. 2003). Tourism offers more often include: the week- ◆◆ the combination of wellness and gastronomic tour- end of culinary school; dining in famous restaurants ism – Wellness trips are increasingly integrated with the proven reputation; visits to rural markets and with tourism, food and beverages. A wellness households; visits to food producers; organizing a street 152 Resources as a Basis for Achieving Quality and Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Figure 1. Attributes affecting the evaluation of travel dining experience Source: Chang et al. (2011, p. 311) tour with food; organizing tours to festivals and world- offer is an integral part of the culture of a nation and famous food-related events (like Gloucestershire cheese is often based on the national cuisine, local and folk rolling festival or Tomato Throwing Tomatina Festival elements, it contributes to the destination competitive- tours) etc. ness. UNESCO has established a network of cities “Crea- In addition, tendencies in gastronomic tourism to- tive Cities by UNESCO” that work towards promoting wards destination sustainability, further the interest cultural diversity, where gastronomy is allocated as a in the local culture and tradition and authenticity of separate thematic unit. This network includes 18 cities gastronomic experience, willingness of tourists to pay with the specific, live gastronomic community and local more for food and drinks, and the potential of combin- tradition in food preparation. In addition to these initia- ing gastronomic tourism with other forms of tourism tives, a number of national and international associations (rural, wellness and spa tourism), and thus contribute have been established in recent years to strengthen the to destination competitiveness. branding and attract international tourists (as a “Sustain- able network of cities-food” in the UK, “Cities of food” References in France, the project “Gastronomic cities” established by Urbact-European program for sustainable develop- Almerico, G. (2014). Food and identity: Food studies, cul- ment of cities). The most widespread is still the oldest tural, and personal identity. Journal of International program “Cittaslow”, created in 1997 in Italy, in order to Business and Cultural Studies, 8, 1-7. expand the philosophy of slow food to local communities Arnold, R., Berry, R., & Bradley, E. (2000). A Century of and their governments. Currently, more than 190 cities Food Science. Chicago, IL: Institute of Food Tech- around the world are involved in this program. nologists. Ashley, B. (2004). Food and cultural studies. London: Conclusions Routledge. Barthes, R. (2008). Toward a Psychosociology of Contem- porary Food Consumption. In C. Counihan and P. Gastronomy tourism is one of the tourism market Van Esterik (Eds.), Food and Culture: A reader, (pp. responses to the demands of the “new” tourist who 28-35). New York: Routledge. wants to gain new experiences and knowledge on a trip. Beardsworth, A., & Keil, T. (1997). Sociology on the Menu: Components of the local are always included in food an Invitation to the Study of Food and Society. Lon- consumption in the tourism context. As gastronomic don: Routledge 153 Resources as a Basis for Achieving Quality and Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Bender, D., Ankeny, R., Belasco, W., Bentley, A., Mán- du Rand, H.A.(2003). The role of local and regional food dala, E., Pilcher, J. M., & Scholliers, P. (2011). Eating in destination marketing: A South African situation in class: gastronomy, taste, nutrition, and teaching analysis. Journal of Travel & Tourism Marketing, food history. Radical History Review, 110, 197-216. 14(3-4), 97-112. doi:10.1215/01636545-2010-035 Frochot, I. (2003). An analysis of regional positioning and Bourdieu, P. (2010). Distinction: A social Critique of the its associated food images in French tourism region- Judgement of Taste. London: Routledge. al brochures. Journal of Travel & Tourism Marketing 74(3-4), 77-96. Cavicchi A., & Ciampi Stancova, K. (2016). Food and gastronomy as elements of regional innovation strategies. Hall, C.M., & Sharples, L. (2003). The consumption of Spain: European Commission. doi:10.2791/284013 experiences or the experiences of consumption? An introduction to the tourism of taste. In C. M. Hall, Chang, R.C.Y., Kivela, J., & Mak, A.H.N. (2011). At- E. Sharples, R. Mitchell, N. Macionis & B. Cam- tributes that influence the evaluation of travel din- bourne (Eds.), Food Tourism Around the World: ing experience: When East meets West. Tourism development, management and markets, (pp. 1-24). Management, 32(2), 307-316. doi:10.1016/j.tour- Oxford: Butterworth-Heinemann. man.2010.02.009 Mak, A.H.N., Lumbers, M., & Eves, A. (2012). Globali- Counihan, C., & Van Esterik, P. (2008). Food and Cul- sation and food consumption in tourism. Annals of ture: a reader. New York: Routledge. Tourism research, 39(1), 171-196. doi:10.1016/j.an- Douglas, M. (1972). Deciphering a meal. Daedalus, 101 nals.2011.05.010 (1), 61-81. Long, L.M. (2004). Culinary Tourism. Lexington: Univer- Dallen, J.T., & Amos, S.R. (2016). Religious heritage, spir- sity Press of Kentucky. itual aliment and food for the soul. In D.J. Timothy Williams, H.A., Williams, R.L., & Omar, M. (2014). Gas- (Eds.), Heritage cousines: Traditions identities and tro-tourism as destination branding in emerging tourism, (pp. 104-119). New York, NY: Routledge. markets. International Journal of Leisure and Tour- Dallen, J.T. (2016). Heritage, cuisines, foodways and cu- ism Marketing, 4(1), 1-18. linary traditions. In D.J. Timothy (Eds.), Heritage World Tourism Organization. (2012). Global report on cousines: Traditions identities and tourism,(pp. 1-25). food tourism. Madrid: World Tourism Organiza- New York, NY: Routledge. tion.

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Resources as a Basis for Achieving Quality and Destination Competitiveness

The role of cultural and historical heritage in tourism development of the Maleshevo Mountains

Ace Milenkovski, Abstract: The cultural and historical heritage belongs to the group of developed, an- Sashko Gramatnikovski, thropogenic values, which play or may play a major role in the overall tourism Dejan Nakovski development. All objects that are part of the cultural and historical heritage are characterized by different levels of attractiveness, and therefore, are not equally important for tourism development. Those objects of cultural and historical heritage, which are well preserved, have a greater cultural and historical value University of Tourism and Management and are characterized by their greater attractiveness. Accordingly, if the area in Skopje, has a number of such objects, they can represent individual tourist motives. Skopje, Macedonia By contrast, there are objects of cultural and historical heritage that are less attractive and they have a lower tourism value, and thus, their function is to complement the tourism offer of the area. The purpose of this paper is to present the objects of cultural and historical heritage of the Maleshevo Mountains, through recognition of their cultural and historical value as well as tourism objects and attractions. The Maleshevo Mountains include settlements located there that represent attractive tourism destinations in the country. These towns have developed and are developing several tourism forms such as ecotourism, rural tourism, mountain tourism, winter sports tourism etc. Taking into account the existing forms of tourism, this paper will identify the opportunities that can be offered by the cultural and historical heritage of the Maleshevo Mountains in order to supplement and enrich the tourism offer and stimulate tourism growth of the area.

Keywords: tourism resources, tourism destination, Maleshevo region.

Introduction

The cultural and historical heritage can be understood as a characteristic of the featured space and the population living within the given area, with all its characteristics. A certain degree of attractiveness containing attractive tourism attributes arouses a certain amount of interest among visitors and tourists at all destinations. Depending on the characteristics of attractiveness, cultural and historical heritage can be the basic feature or an incentive and an additional element for the tourists within a given Correspondence: Ace Milenkovski destination. The importance of cultural and historical heritage for tourism development and promotion of tourism trends was explained by Vita Koja e-mail: (2005) “the cultural heritage as part of human life is real evidence of the [email protected] past and it attracts tourists and encourages tourism movement.” 155 Sitcon 2016 Doi: 10.15308/Sitcon-2016-155-160 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Cultural and historical heritage can be both tangible or urban areas. This means that it is necessary to consid- and intangible, and it falls into the category of anthro- er and present the rural-cultural offer of the area of the pogenic tourism values and as such, can be found under Maleshevo Mountains, which are part of the rural area. various types and forms of tourism (art, architecture, The cultural and historical heritage can be used in order archeology, ethno - social values, customs, traditional to improve the development of rural tourism by analyz- crafts, events, gastronomy etc.). When correlated with ing the trends in contemporary tourism and see where tourism, the cultural and historical heritage can be as- the cultural and historical heritage is highlighted and sociated with travel “Cultural Tourism”, which is actu- emphasized in the rural area. Ivanovic and Ivkov-Dzig- ally a special form of alternative tourism. Therefore, it is urski (2013) claim that rich cultural heritage has become necessary to consider further clarification of the relation- a factor that affects the competitiveness viability of the ship between cultural and historical heritage and tourism overall tourism product in certain area. The importance forms from another perspective. Without going into its of cultural and historical resources for development of definition and analysis, cultural tourism and cultural and rural tourism is highlighted by Vidic (2013) who states historical heritage are integral parts of almost all tourism that attractive resources in rural areas include natural movements, and are part of a modern tourism product, and cultural resources which affect the profiling for vari- and as such almost all visitors and tourists include some ous forms of rural tourism, which tend to increase. cultural activity during their stay. This confirms the importance of the cultural and his- For tourism destinations that have the cultural and torical heritage for tourism development in the area of historical heritage and feature a high historical, cultural the Maleshevo Mountains and it also justifies and con- and tourism value, we can say that this form of cultural firms the importance of the topic. tourism is clean, independent, separate and the basic form of tourism. Such destinations are mostly large Eu- Theory and Methodology ropean cities, and therefore, cultural tourism and cultural - historical heritage are often mixed or seen as part The basic theoretical assumption for writing this pa- of urban tourism. Accordingly, Ana Maria Pahos (2010) per is that cultural and historical heritage can be found says that culture is eminently a city industry and more in the Maleshevo Mountains. Cultural-historical herit- generally, an urban phenomenon. The same authors age could be used to enrich the present tourism product point out that the European cultural heritage is one of and increase its attractiveness, and trigger the growth of the oldest and most important tourism engines. This tourist turnover in the area. statement is quite appropriate considering that large and To that end, it is necessary to make an inventory of old European cities have an abundance of forms of the the cultural and historical heritage of the area, its spa- world cultural heritage. tial distribution and availability for tourists, the level of However, it should be taken into account that almost visits by tourists and its attractiveness, so it can be used all tourism destinations possess cultural and historical as a secondary and tertiary tourism motive. heritage and can become a cultural tourism resource of The herein used data were gathered from secondary the given destination. Such cultural - historical tourism sources, available at the State Statistical Office, the list resources are very important to complement the tour- of objects protected by the Ministry of Culture of the ism offer within the destination such as the Maleshevo Republic of Macedonia, a map of religious buildings in Mountains, where the basic motives for tourism include: Macedonia, the Action Plan for Tourism Development nature, the mountains, clean air, flora and fauna, so in of the Maleshevo area etc. While preparing the paper, this area there are other forms of selective tourism that the author used the following scientific research meth- have been developed. The importance of cultural tourism ods for data processing: a method of analysis in which resources in these destinations is highlighted by the Law the collected the data is analyzed, a comparative method (2002). According to the same author, most of the cul- for comparing data and a statistical method for presen- tural resources have been hierarchically placed according tation of the statistical data. to their attractiveness and they can be in the second or third place, which means that they are not the basis for tourist motivation. Results and Discussion When watching tourism from the aspect of spatial determinant, the opposite of urban tourism would be ru- The Maleshevo area is located in the eastern part of ral tourism, which includes tourist movement in all areas the Republic of Macedonia. This entire Eastern Mac- that are not part of the urban area or are outside the city edonia is characterized by a relief whose main features 156 Resources as a Basis for Achieving Quality and Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS are mountains and valleys. Large relief forms include ting tourism, mountain or mountain and climatic health mountains, valleys and canyons and they make a puzzle tourism, weekend tourism etc. Previous forms of tourism which looks like a chessboard. In the area with its specif- and the level of tourism development in the Maleshevo ics are the Males or Berovo or simply Maleshevo valley area accompany the activation of cultural and historical and mountain. The specific relief structure and geogra- heritage in the function of tourism development, espe- phy of the area indicate that it is an area that has been cially when it comes to cultural and historical tourism isolated in the past from the rest of the country. Because resources with secondary impact and it can be easier of this it has developed its own culture and tradition that to put them into operation in tourism such as cultural is characteristic for the Maleshevo area. It is also an area tourism, in this case, it is already acknowledged as a tou- with the rich and tumultuous historical past, there is tan- rism destination. According to McKercher and du Cros gible and intangible evidence and they are part of the (2002) “cultural tourism as any other specific form of cultural and historical heritage of the Maleshevo area. tourism, it is difficult to develop where tourism activity Since the rural mountain area and cultural and historical is very weak.” heritage is being analyzed herein, it is important to un- Considering the above-given remarks, there is a need derstand the demographic situation. The central town of to represent the cultural and historical heritage in the the Males area is Berovo, which is also the administrative area, so it can be noted and the motion can be set for the center of the area. Berovo belongs to the group of small development of rural and cultural tourism as an integral towns in the country, with less than 10, 000 inhabitants. segment of the overall tourism offer and product of the Eight villages or rural areas gravitate towards Berovo. Maleshevo area. The cultural and historical heritage of This means that Berovo consists of nine towns, of which the area is quite rich, diverse and covers the period from eight are rural and one is an urban settlement. The fol- ancient times until today. The cultural and historical her- lowing table presents the number of residents in Berovo. itage of the area consists of the Maleshevo area: The data from the previous table, presenting demo- ◆◆ Facilities protected by law by the Ministry of Cul- graphic data and analysis of the Maleshevo area, indicate that there are rural areas with good demographics in ture of the Republic of Macedonia: terms of population and these rural areas can be con- - Monastery of “Archangel Michael” stituted in the so-called “living villages” and they can - Archaeological site “Machevski Chuki” realistically develop rural tourism as a specific form of - Archaeological site “Village” tourism. - House in Berovo (Kocho Racin Street 11) The relief, spatial and demographic characteristics - House in Berovo (M. Tito Street 127) are mentioned to point out that these features have determined the tourism development in the Maleshevo ◆◆ Historic monuments: area, and according to these characteristics, they have - Centenary school building in Berovo been successfully developing or have developed some - 50th Division Monument in the village Mi- alternative forms of tourism such as rural tourism, hun- trashinci

Table 1. Number of population, households in the Berovo area Item number Settlement Total population Number of households Number of apartments/houses 1 Berovo 7002 2375 3190 2 Budinarci 682 238 341 3 Vladimirovo 861 318 625 4 Dvorishte 757 208 391 5 Machevo 206 76 109 6 Mitrishinci 729 228 350 7 Ratevo 844 307 438 8 Rusinovo 2095 710 982 9 Smoimirovo 765 255 316 10 Total: 13941 4715 6742 Source: SSO (2015).

157 Resources as a Basis for Achieving Quality and Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

- Monument of the leader of the Kresna and Ra- ◆◆ The group of cultural and historical heritage can zlog Uprising Dimitar Pop GeorgievBerovski be expended with the development and enrich- - Monument of the executed citizens in World ment of the tourist offers, which can also be at- War II tractive for the visitors like the traditional cus- - Memorial plaque for the liberation of Berovo toms of the population by performing various in the World War II rituals such as weddings, baptisms etc. - Plaque of fallen soldiers in the National Libe- Although it is rather small, the Maleshevo area is ration War relatively rich in cultural and historical heritage. Intan- - Memorial plaque for the formation of the 51st gible cultural heritage is particularly interesting in the Division context of the subject as some of the previously men- - Plaque for the battle at Obozna in the World tioned events are characterized by particularly broad ap- War II peal and attract a lot of visitors whose primary motives - Monument in Suvi Laki are varied tourism events, such as: carnival - festival “ - Memorial bust of Jane Sandanski in the village Bamburci” and celebration of the great Christian holi- Smojmirovo day, where approximately 15,000 pilgrims gather each th - Memorial bust of Dedo Iljo Maleshevski in Be- year on August 28 . rovo Normally, all previously listed items of cultural and - Memorial bust of Dimitar Pop Georgiev Be- historical heritage are of equal historical, cultural and rovski in front of the monastery in Berovo tourism importance, some are featured with more at- - Memorial bust of Atanas Razdolov tractiveness while others are marginal as it is confirmed - Memorial bust of Nikola Petrov - Rusinski, in the survey made during the preparation of the Strat- Leonid Pecovski, Pante Radinski and Dimitar egy for Tourism Development of Berovo. In this sur- Pop Mladenov vey, the respondents were asked the following question: - Memorial bust of Aco Ruskovski Which cultural and historical monuments are attractive and can be a magnet for tourists? The results were pre- - Memorial bust of Pola Boshnachka in the vi- sented in the following graph: llage Vladimirovo - Memorial bust of Jovan Kozovski ◆◆ Religious Objects: - Temple “Nativity of the Virgin” - Berovo - Temple “St. Todor” Berovo - Temple “St. Peter and Paul” - village of Ratevo - Temple “St. Paraskeva” - village Rusinovo - Temple “St. Prophet Elijah” - village Mitras- hinci - Temple “St. George” - village Budinarci - Temple “Assumption of the Virgin” - village Robovo ◆◆ Historical Museum Berovo (within the monastery “St. Arhangel Michael”) ◆◆ House of Culture “Dimitar Berovski” - Berovo, where The Natural History Museum, the Nation- Figure 1. The importance of cultural and historical al Library “Narodna Prosveta” with its reading monuments for tourist motives room, movie theater and other forms of culture and art such as a cultural ensemble, drama stu- The survey results correspond with the actual situa- dio, traditional folk orchestra, ethno orchestra, tion and the attendance of cultural and historical monu- art studio, children’s folk club etc., are situated. ments as tourism resources, because the first two build- ◆◆ Cultural events (“Maleshevo area on a palm”, ings are also the most visited buildings of the cultural “Days of Goce”, “Pijanechko Maleshevo wed- and historical heritage of the Maleshevo area. There is ding”, “Bamburci”) no precise data on the number of visitors who visit these ◆◆ Traditional gastronomy, traditional crafts, tradi- two religious buildings, primarily because of the lack of tional hospitality etc. evidence of the Macedonian Orthodox Church and the 158 Resources as a Basis for Achieving Quality and Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS absence of ticket selling policy. Nonetheless, we may According to these data, it is assumed that about 75% of take as a benchmark the number of followers around the tourists, or about 11,529 tourists that visit the area, 15,000 which attend the Virgin Mary Church every year among other attractions also visit the two most impor- on August 28th. Another indicator that evokes interest tant cultural, historical and religious facilities. in the cultural and historical heritage is the fact that some of its elements such as gastronomy, folklore etc., Conclusion are part of the tourism offer and package arrangements The analyzed area of the Maleshevo Mountains, and of the hotel complexes “Manastir” and “Aurora”. The Maleshevo area, due to its specific relief structure (mostly managerial teams of these hotel facilities saw the op- mountainous area) contributed to isolation of that area portunity to enrich the tourism offer with the cultural in past. Due to that, the population possesses specific and historical heritage, in order to increase the overall culture and customs. This has resulted in the rich and guest satisfaction. The area of Maleshevo Mountains is diverse cultural heritage of the Maleshevo area, which the most developed tourist area in the statistical region was created through a long and tumultuous history and of Eastern Macedonia, the level of tourism development historical developments in the area. Today, such partic- of the area is presented in Table 2. ularity and specificity is manifested in almost all features The table presents the number of tourists recorded of the population (language - dialect, special customs, by the State Statistical Office, but it should be taken into preserved old crafts, specific architecture etc.). consideration that this figure does not include day- The Maleshevo area is a mountainous area that abo- trippers who are not recorded. According to the data unds in natural beauty and natural rarities and so far, from Table 2, it can be noted that the analyzed area they have successfully put into operation in tourism and in 2015 was visited by a total of 15,372 tourists out of created a brand as a mountainous tourism destination which 9,321 or 60.6% were domestic tourists, while the in the Republic of Macedonia in which they have de- remaining 6,051 or 39.3% were foreign tourists. For the veloped or are developing different forms of alternative tourism development of the area in relation to the same tourism (summer mountain tourism, winter mountain region states the fact that a total of 25,907 tourists visited tourism, rural, eco-tourism, hunting, rural tourism etc.). the same region, 59.3% or 15,372 tourists have visited The achieved degree of tourism development has trig- Malesevo mountains area. In terms of the origin of tour- gered further development of tourism by promoting the ists, 55.6% of domestic tourists in the statistical region rich cultural and historical heritage. These conclusions of Eastern Macedonia are in the analyzed area, whereas have been embraced by tourism workers in the hotel in- the share of foreign tourists increased and accounted for dustry and culture, and they have incorporated in their about 66% of the total number of foreign tourists who hotel tourist offer. In this context, the authors believe visited the same region. These data indicate a high level that the rich history of the Maleshevo area is represent- of tourism development of the area analyzed in relation ed by cultural and historical heritage, and it must be to other segments presented in the statistical area. If present in every tourist offer as a secondary and tertiary the presented results are compared to the data from the tourist motive. In some cases, some cultural and histori- survey presented in Figure 1, we can assume that 45% cal tourism resources should obtain a higher degree and or 6,917 tourists visited the monastery of St. Archangel become primary tourist motives, and these will be the Michael, about 30% or 4,611 tourists visited the church main interest and motivation for the tourists visiting the St. Mary (Holy Mother of God), 16% or 2,459 tourists area. This will not only attract more tourists but make visited the city museum, while the remaining 9% or the Maleshevo area a tourism destination offering a va- about 1,383 tourists have visited other sights in the area. riety of selective and specific forms of tourism.

Table 2. Tourist arrivals, overnight stays and average length of stay Arrival Overnights spent Average length of stay Domestic Foreign Domestic Foreign Domestic Foreign tourists tourists tourists tourists tourists tourists

Eastern statistical region 16751 9156 31612 21745 1.88 2.37

Malesevo mountains area 9321 6051 22318 16528 2.39 2.74 (Municipality Berovo) Source: SSO, 2016.

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Resources as a Basis for Achieving Quality and Destination Competitiveness

THE ANALYSIS OF TOURISM DEVELOPMENT OF THE CANYON MATKA NATURAL PARK

Meri Nickova, Abstract: The paper highlights the importance of sustainable tourism development of Andreja Mackic, Canyon Matka. Namely, this area boasts wonderful natural and anthropo- Goran Apostolovski genic features that are not sufficiently explored in the tourism aspect. The analysis of the canyon as a natural habitat protected by the environmental law is given herein. Canyon Matka has a huge potential for sustainable tourism development. There is a need for higher intensity of tourism development in University of Tourism and Management the Republic of Macedonia, as a branch of economics, while respecting the in Skopje, environmental protection, and creating living and working conditions for Skopje, Macedonia the local population at the destination, whilst at the same time being able to meet the interests and recreational needs of tourists. That being said, tourism activity will not damage the canyon resources, which will remain intact for future generations. Sustainable tourism development should mitigate the dispute between tourism activities and visitors on one side, and the natural habitat and the local population, on the other side. Keywords: sustainable development, tourism, Canyon Matka, natural monuments, protection.

Introduction

Canyon Matka is located on the lower flow of the river Treska, about 15 kilometers south-west of the city of Skopje, at the outskirts of Saraj Municipality. The Treska gorge from Zdunje till Matka is 29.5 kilometers long. It is settled between the mountain massive of Karadzica (Suva mountain-Rudina-Narta) in the east and Suva Gora Mountain with the mountain Massive Osoj, in the west.The last 15 kilometers, before Matka Monastery, the river Treska is flowing through a gorge with a canyon like characteristics. In 1938, a concrete river dam project was made by an architect, Miladin Pekinar, who turned a very narrow passage, at the time, into a canyon with the river dam (Lilcic, 1995).Traffic connection plays a very important role in tourism development. That is the only means that domestic and foreign tourists have as an option to come and visit, Correspondence: Meri Nickova and experience and explore the nature of the region. The vicinity of the capital city (Skopje) provides a better transport connection and transport e-mail: network. The road network is the basics of the total traffic system in Mac- [email protected] edonia (Stojmilov, 2010). 161 Sitcon 2016 Doi: 10.15308/Sitcon-2016-161-168 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

come, and there should be better road infrastructure trough which visitors could reach the canyon. Having good road infrastructure would enable, amongst other things, transport connection from other active and passive recreation centers, such as Canyon Matka and its immediate surroundings.

CANYON MATKA AS A PROTECED NATURAL HABITAT (History)

Protected natural habitats base their existence on the effect of allowing its valuable attributes to be experienced by visitors, and tourism is one of the most effective ways to utilize these places (Curcic, 2003). Accord- ing to the international union of protected natural areas, Figure 1. Canyon Matka at the part where the artificial there are the following categorizations in the Republic lake is settled of Macedonia: strictly protected natural resort, national park, monument of nature, a region of special natural Canyon Matka as part of the capital city Skopje is characteristics, special herbal and animal species area rather close to one of the most important traffic and (Dimitrijevic, 2008). communications corridors, Pan European Corridor 10, Canyon Matka has been declared a protected area which connects the developed Northern European coun- for the first time by the proposal of the city assembly tries with less developed countries of South Europe. The of Skopje in 1994 (Official Gazette of the Republic of Pan European Corridor 8 holds even a bigger impor- Macedonia, No. 3/94). The Declaration was made in ac- tance of connecting the west with the east, and the cor- cordance with the Skopje city statute, and the Law on ridor passes by the Municipality of Saraj. Canyon Matka protection of natural rarities (Official Gazette of the Re- is around 5 kilometers away from it, which gives this public of Macedonia, No. 41/73). There are 5,442 ha, all location a connection to one of the most frequent traf- of which is to be managed by the city of Skopje. The fic roads in the Republic of Macedonia. The region itself main reason was the richness in flora and fauna. The sec- holds a very favorable central position and good traffic/ ond act of categorization of this area as a natural monu- transport connection, which provides an excellent opment came into effect in 2010, in accordance with the portunity for further tourism development. Law on protection of natural rarities dating from 2004. In this regard, Skopje is by far the best tourist re- In 2010, under the UNSECO heritage program, a study lay from which most of the visitors to Canyon Matka was developed for revalorization of natural resources of the protected area/monument of nature, in which recommendations were given for the directions to be taken for future development of economic exploitation of Canyon Matka. The canyon is also included in CORONE bio typing of Macedo- nia and the EMERALD network of R. Macedonia, which gives even a bigger importance for future development of the natural characteristics of this area (UNDP, 2010). The canyon is a living habitat for a great number of endemic species protected by international con- Fig. 2. A satellite image of the location of Canyon Matka ventions, to all of which Macedonia in relation to the capital city Skopje is a signatory. The caves located in 162 Resources as a Basis for Achieving Quality and Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Canyon Matka offer a great number of locations for re- THE MATERIAL BASIS FOR TOURISM DEVELOPMENT production and hibernation of the bats. The Republic of Macedonia is also a signatory to the agreement for pro- Owing to the proximity to the capital city of Skopje, tection of bats in Europe (London 1991). There are 133 Canyon Matka is one of the most visited tourism loca- bird species registered in Canyon Matka. The canyon’s tions in the surroundings of Skopje. According to the ornithological importance is in the fact that it fulfills information gathered from the NGO, Peoni, some 150 the criteria for being named an important area for bird to 200 people visit every section of the canyon. That habitats in Europe. The natural values and importance number reaches up to 1,500 visitors during the week- stem from the fact that the canyon boasts the diversity end and religious holidays. Based on that, it could be of species. Certain herbal and animal species registered concluded that around 150,000 people visit Matka each in the protected area are of enormous importance, gi- year. ven the fact that the same ones are protected under the It is worth noting the Matka Canyon boasts good international nature procreation acts, including many tourism and recreational infrastructure that can be used conventions, agreements, the EU directive in regards by the visitors. Here we can include pedestrian trails, to environmental protection and IUCN (the Red List of bike trails, instructions for mountain climbing, alpin- endangered species). ism, river boats for lake tours, as well as the infrastruc- Canyon Matka has also been declared part of the nature built in the caves Vrelo and Krshtalna. tional heritage and a natural monument. Several projects are currently ongoing at the site: building of a hanging bridge across Lake Matka; building a natural-history museum; building of an iron trail (for amateur hiking) etc.

Hiking trail monastery St. Andreja-Vrelo cave

The hiking trail St. Andreja-Vrelo cave is 4100 m long, at the latitude of 450 m, and is all along the coast of the artificial lake Matka. It trails all along the dams St. Petka (Matka 2) and Kojzak, and is 20 km long. This trail has a recreational character and is one of the most frequently visited places for visitors who come to Matka. In the near future, an addition of benches for rest and Figure 3. Church St. Andreja at Lake Matka fence down the trail are planed, taking into account its recreational character. Nonetheless, this construction idea would be extremely difficult to implement bearing Table 1. List of anthropogenic properties declared as in mind unsafe conditions. cultural monuments

Decision no. 27/49 dated Monastery St. Andreja, February 22, 1968 no. Matka Central registry 731

Monastery St. Nikola, Decision no. 27/59 dated Nikola Shishevski, Sh- February 28, 1968 no. ishevo Central registry 835

Decision no. 27/60 dated Church St. Nikola, Sh- February 28, 1968 no. ishevo Central registry 149

Decision no. 27/61 dated Monastery church St. February 28, 1968 no. Bogorodica, Matka Central registry 123 Figure 4. Photo of a hiking trail Monsestery St. Andreja-Vrelo cave 163 Resources as a Basis for Achieving Quality and Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Hiking trail cave Vrelo-Cave Ubavka ters and vertical depth of 427 meters. This cave is insuf- ficiently explored and it is believed that it could reach over 300 m of depth. The Vrelo-Krshtalna-Ubava trail is 700 m long and at 150 m of altitude. The beginning of this trail, meaning the part between the trail and the coast, which is Trail for kayaking on wild waters approachable only by a boat, until the cave Vrelo is adapted for tourist visits, with trails with a fence, and This trail is found a hundred meters away from the there is an aggregate with electric charging and light in HEC Matka, on the river Treska before it passes by the the cave. In the other part, the trail could not practically village of Dolna Matka. It’s characterized by is a slalom be reached by visitors. trail of moderate difficulty (B category), with a length of 320 meters, from start to finish, with the width of 8-12 meters. The velocity of water flow is 183 m /s. Hiking trail monastery St. Andrea - St. Nedela These characteristics of the trail allow international and European kayaking competitions to be held here. The trail named St. Andrea - St. Nedela is 1316 me- The first international kayaking competition was held ters long, at the altitude of 460 m. This trail is a moun- here in 1975 and the European kayaking competition tain hiking trail and is not primarily intended for rec- in 2004, as well. Each year, in March-April, an inter- reational purposes. The whole length of the trail is at a national wild water kayaking competition (C category) very steep angle and if one attempts to hike here, it is takes place on this trail. necessary to undergo additional training for this type of climbing. The trail by its configuration is stretched trough different types of terrain, such as forest to peaks and climbing rocks.

Tourism and recreational infrastructure in the Vrelo cave

Vrelo cave is set to be a tourism attraction. It is located in its most picturesque part, at the “big and small lake”, and is hardly reachable by visitors. Because of that, a new natural trail has to be developed as well as widening of the platform for visitors, for up to 50 person capacity. In order to fit the local ambience, the trails Figure 5. A kayaking trail on wild waters of river have to be formed with onsite materials-stones which Treska are found in the cave. In cave Vrelo, which is currently the only exploitable cave in a speleological park for Biking trails tourism purposes, besides some structural projects, illumination is planned, with a special emphasis on cer- In order to reach Matka with a bike, one has to go tain geo-morphological decorative (cave ornaments) through the mountain trails of Vodno, or the asphalt structures found in the cave. The planed illumination road through Saraj. The trail on Vodno is more intended should make it even more attractive for visitors and give for those prefer mountain biking while those who prefer a better view of the two lakes in the cave, some of the road biking are more likely to take the Saraj road. The most beautiful and large cave galleries, and numerous Vodno trail is rated as an extreme biking trail and is rec- stalagmites and stalactites. ommended exclusively to experienced mountain bikers. It is netted with many little side trials which give way to beautiful landscape, such as the view of the mountain Speleo-diving home and the canyon around it. Due to its demanding and extreme trails, this one is not recommend to begin- Speleo-diving at Matka can be developed as an activ- ners or inexperienced bikers. The road that goes through ity in the underwater cave Podvrelo, where the spring Saraj is an asphalt one, and it takes the bikers through Koritishte is located. A team of Belgian speleo-divers several settlements: Saraj, Glumovo, Dolna Matka. Even has succeeded in reaching a horizontal depth of 427 me- though it’s not very wide, it does not require a lot of effort, 164 Resources as a Basis for Achieving Quality and Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS and it can be used by all categories of bikers. There is one As can be seen in Table 2, a growing tendency can be more trail in the vicinity of Matka which goes through the observed in the number of tourists who visited Canyon forest reserve and the hunting grounds of Jasen. Matka during the observed seven-year period. Total number of tourists who visit Canyon Matka was the highest A guide and recommendations for sport climbing in 2014 and the lowest in 2008, but the marked increase and alpinism in the absolute number is 21,052 tourists i.e. expressed in a percentage it is a growth in the number of tourists for 17.34%. Also, a constant increase in the number of tourists Alpinism and mountain climbing trails are located from 1% to 5% can be observed during the period 2008- on both sides of the canyon. Matka is the heart of alpin- 2014. Greater increase in the number of tourists could be ism in Macedonia. The rock of Matka by composition observed in 2012 compared to 2011 when the number of is chalkstone, characterized by medium density. Alpinist tourists increased by 9%. and sport climbing trails are found mainly on five points: “Centrala”, “Otmarova karpa”, “Karpa kaj domot”, “Mat- kino trlo” and “Iglitte na Matka”. POSSIBILITIES FOR SUSTAINABLE TOURISM The best period for mountain climbing at Matka is DEVELOPMENT ACCORDING TO UNWTO INDICATORS from March till June, and from September till November. There are 40 trails available for use, with the level of difficulty ranging from III do VII and A2 according to the Tourism development has a positive impact on the UIAA, and they are 150-200 meters long. All the alpinist natural and cultural assets and it will have huge positive ef- trails are well secured. There are around 30 sport climb- fects on the local community, while not causing any kind of ing trails, with the difficulty level ranging from VI+ up to degradation. The concept of sustainable tourism develop- IX, according to the UIAA. They are all very well secured ment aims to protect all living habitats, trough affirmation with split pitons and the length of the trial varies from 15 and social integrity. On one side, nurturing the cultural till 40 meters. specifics of the local community, and on the other side, satisfying the tourists’ needs from which the community RESEARCH ANALISYS will profit. Sustainable tourism development should have an ecological, socio-cultural and economic justification and REVIEW AND ANALYSIS OF TOURIST ARRIVALS should guarantee development of vital ecological processes, which should be compatible with the cultural and tradi- The main indicators that indicate the level of tour- tional values of the society, whilst being economically ef- ism development in the Canyon Matka are the number fective. The main characteristic of sustainable development of tourist arrivals. is environmental protection. That means that no negative consequences may occur, while having a maximum tourism exploitation of the location. Considerable attention Table 2. Tourist arrivals in the period from 2008 to 2014 should be devoted to protecting ecological capacity of the Tourist arrivals destination, so there is no degradation of the environment. Guest satisfaction should be at the highest level, as well as Domestic Foreign Year Total the level of protection of the environment and destination. tourists tourists The herein used data were acquired based on the analy- 2008 121.342 99.000 22.342 sis and synthesis of the ongoing documentation related to the theme. The qualified projection of sustainable develop- 2009 122.546 97.821 24.725 ment may vary due to change of indicators. The indicators 2010 124.672 99.308 25.364 provide monitoring of the changes in time. The indicators for tourism impact on the natural habitat are very hard to 2011 135.529 109175 26.354 identify, due to the fact that the effects of tourism activity 2012 138.724 111200 27.524 are complex and vary based on the location and region. The World Tourism Organization (UNWTO) has accepted 11 2013 139.394 110051 29.343 categories of indicators which may give us relevant grades for sustainable tourism development. We may use part 2014 142.394 111135 31.259 of this to provide the qualification as to whether Canyon Source: State Statistical Office of the Republic of Macedonia (2015) Matka and its surroundings have the capacity for sustain- Data from Statistical review: Transport, tourism and other services able development. 165 Resources as a Basis for Achieving Quality and Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Table 3. The analysis of the UNWTO indicators for sustainable development of Canyon Matka

As for indicator 1, we may say that Matka Canyon is categorized as a “Monument of nature”. In accordance with the criteria of the International Union for Conservation of Nature (IUCN) and the categorization of the protected area according to the Law on En- vironmental protection (67/2004), this is the third category of protected area-Monument of Nature with valuable geological, geo-morphological, hydrological, floristic and fauna elements. The goal is to ensure protection of the existing majority of geo-morphological assets in the Canyon Matka, as well as for preservation of the flora and fauna, mostly for preserving the level of basic genetic fond for further reproduction, which is prescribed by Indicator 1: the following regime of protection: Elements of natural - Control of movement and detention in the area of the “Monument of nature” with habitat previous announcement with the authorized service on the ground; (specified territory under - It’s prohibited to litter the location and its surroundings; protective regiment) - Prohibition of any action that may damage and ruin, or removal of calcites forms from the caves (stalagmites, stalactites etc.) - It’s prohibited to make noise, vibrations and explosions in the vicinity of the natural monument; - It’s prohibited to visit and enter the caves which are not intended for tourism purposes; These are some of the orders in the decision of proclamation order in which Matka Can- yon was declared a “Monument of Nature”, categorized by the project “Management and business plan (management plan) for the period from 2011 to 2020.

The indicator 2 which applies to the amount of land of the “Monument of nature” is in regard to the zones in which there are tourist movements and zones in which all tourism exploitation is prohibited. According to the Law on Environmental protection (Official Gazette of R.M, 67/2004), the following zones are available: 1. Zone of strict protection where the highest level of protection will be one of the biggest interest, and it’s characterized by an authentic unchanged eco-system with the small change of identity as a result of traditional means of management. Indicator 2; 2. Zone of active management will be the zone of high interest in protection, in which The land used for certain managerial activities will go under way in order to preserve, revitalise and re- tourism purposes (the habilitate habitats, ecosystems and other elements. It will be allowed to have certain national land that is economic activities, which will have no destructive impact on the primary goals of categorized as such) protection of the zone of active management, such as eco-tourism and traditional extensive agriculture. 3. Zone for sustainable exploitation will represent a large part of the protected area which does not have assets to be protected, which have infrastructure objects, cultural heritage objects, forest spices which are not as characteristic as in the protected area, as well as settlements with agricultural land. 4. A tampon zone will be placed outside the area which is declared as a Monument of nature and it will have a protective role for the zones listed above.

Indicator 3 is related to the threats against the eco system in Matka Canyon. There are Indicator 3. 58 registered endemic species of invertebrates on the territory of Matka canyon. 13 of them are endemic on the level of the Balkans. 26 are endemic on the state level and 19 Level of ecological are only on the local level. All of them are endangered species, with the risk of extinction. pressure (number of There are 113 registered species of birds, out of which 16 are placed under the category endangered species flora ENDANGARED with only one pair remaining alive and in the wild. Some bird species are and fauna) completely extinct from the national park. 4 mammal species are also on the endangered species list.

Indicator 4: The analysis of indicator 4 shows that this location is visited on average by 100 to 120 people on a daily basis. At the weekend, this number rises up to 1000-1300. On the basis Intensity of the tourism of this calculation, we can estimate that some 120,000 to 150,000 people visit Matka. The development (average biggest number of people uses the hiking trails for recreational purposes. A lesser portion daily visit and average uses the biking trails, alpinism, kayaking, visits the churches, bird watching etc. 5 euro is daily expenditures) the average expenditure of each visitor per visit.

166 Resources as a Basis for Achieving Quality and Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Indicator 5 is directly connected to the quality of water in Matka Canyon. With the regu- Indicator 5: lation of waters act (Official Gazette of R.M. 18/99), there are 5 classes of waters. Based The influence/effect on the water quality testing, we can state that only the waters running in the upper part on receptive areas (the of the Treska river are qualified as the first class clear water. The quality of the water in quality of water) other parts is compromised by the influx of domestic waste water coming from the settlements in the area. Indicator 6: The analysis of the local Indicator 6 is aimed at the local population and the possibilities of exploiting its resources. community education 51.7% have only elementary school education, 33.4 have high school degrees and only level, their awareness in 7.4 have no education whatsoever, and that is one of the most negative indicators. They regards to the monument almost never sell the home grown food to visitors. As for the awareness about their sur- of nature, quality of food roundings, most of the population is aware that Canyon Matka is a natural monument. grown by them) Indicator 7: We can’t find some relevant and public data in regards to indicator 7, because there is Energy use efficiency no method of analysis which might show how much electricity is being used for tourism (one used for the tourism purposes at Canyon Matka. purposes)

Indicator 8: Indicator 8 is related to the strategies and plans for sustainable tourism development that exist in R. Macedonia. There are a few such documents. The national strategy for sustain- Institutional organization able development in the Republic of Macedonia, dated from year 2000; National estimate (existing strategies and for sustainable development in R. Macedonia; Research concept for securing analytical plans for sustainable and prognosis in function of developing the National strategy for sustainable development development). in R. Macedonia, 2003 etc. Indicator 9: Measuring the efficiency Indicator 9 is complementary to indicators 3 and 5 because it refers to an ongoing moni- of managerial activities toring of all changes that are related to the quality of water and follow-ups on the factual (changes in the lists of situation of endangered species of flora and fauna in Canyon Matka. endangered areas, as well as endangered spices)

Indicator 10: Plans and projects for Indicator 10 is in reference to normative regulation of sustainable development in R. Mac- future development edonia. In the pre-amble of the Constitution of R. Macedonia (Official Gazette no.52/91; (existence of plans and no.31/98; no.91/01; no.84/03), the three pillars of sustainable development are prescribed. other documents which Those are: economic development, social justification and environmental protection. determine the sustainable There is also a large number of legal frames which regulate this field. It’s worth mention- development of tourism ing the following: The Law on environmental protection; The Law on regulating waste on a national, regional management; and the Law on regulating the air quality etc. and local level)

According to indicator 11, we can say that the R. Macedonia as a member of the Organi- zation of the United Nations (UNESCO) for education, science and culture, is obliged to take care of the cultural heritage on its territory. R. Macedonia has also signed a great number of international agreements for protection of the environment/nature: Indicator 11: - A protocol for strategic evaluation of the enviroment. This protocol is based on the Expo Convection. R. Macedonia signed it in Kiev, Ukraine. International cooperation (number of protected - A biodiversity convention (Rio). The convention is ratified with the ratification Law (Official assets on the UNSECO Gazette of R.M. 54/97). The convention came into full power in 1998. list, ratified and signed - The international convention for bird protection 1950. The convention is ratified with international conventions the ratification Law (Official Gazette of R.M. 6/73); in the area of nature - The international convention for protection of herbs and plants 1951. The convention protection) is ratified with the ratification Law (Official Gazette of R.M 1/85); - The convention for international trade of endangered species of wild animals and herbs/ plants. (Washington). The convention is ratified with the ratification Law (Official- Ga zette of R.M. 82/99) R. Macedonia became a member/signatory of the convention on October 02, 2000.

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With the analysis of the indicator for sustainable area. On the territory of the national park, there are no tourism development given by the World Tourism Or- urban settlements, but there are villages in the vicinity of ganization, we can say that Canyon Matka and its sur- the park that could be used as the basis for human and roundings have good preconditions for sustainable tour- material resources for tourism development. ism development. Given the fact that Matka canyon has been declared as “Monument of nature”, there are the REFERENCES special regulations for tourist and visitor behavior, regulated with the Environment Protection Law (indicator Curcic, N. (2003). Application of Tourism propaganda tools 1). According to the same law, there are possibilities for in protected natures properties. Beograd: Geografski zoning the area (indicator 2). In reference to the number institut “Jovan Cvijic“. of tourists and visitors, efforts have been made towards Град Скопје. (2010). Менаџмент и бизнис план на Спо- raising their number during week days, and lowering the меникот на природата кањон Матка 2011-2030. same number for weekend visits and religious holidays Скопје: Град Скопје. (indicator 4). The local population is by far not interven- Димитрова, Е., Лилчиќ, В., Антевска, К., & Василевски, ing with the process in the protected area and its sur- А. (2011). Матка културно наследство. Скопје: rounding (indicator 6). In the area of the canyon, there Данте. are numerous endemic species of flora and fauna, which Dinic, J. (1990). Turisticka geografija. Beograd: Ekonomski are protected by the law (indicator 3), and the situation fakultet. is being monitored (indicator 9). The water quality in the Димитријевиќ, Ј. (2008). Еко-туризмот во Република protected area is at a satisfactory level (indicator 5) and Македонија. Скопје: Факултет за туризам. any change in water quality is also monitored (indicator Димитријевиќ, Ј. (2009). Животна средина, туризам и 9). Our country has a good legal regulative in treating одржлив развој. Скопје: Универзитет за туризам this issue (indicators 8, 10, 11) and has signed a great и менаџмент. number of international agreements in the area of envi- Каранфиловски, Д. (1973). Рекреативните површини ronmental protection. All of the above-stated gives us a во Скопје и неговата непосредна околина. Геог- solid framework for sustainable tourism development in рафски видик, кн. 4. Скопје: Географско друштво Canyon Matka and its surroundings. The analysis only на СР Македонија. gives a good basis for additional extensive analysis on the Колчаковски, Д. (2001). Спелеоморфолошки карак- characteristics of the protected area. теристики на карстниот релјеф во Република Македонија. Географски разгледи, кн. 36. Ско- CONCLUSION пје: Географско друштво на СР Македонија. Лилчиќ, В. (1995). Матка низ вековите. Скопје: Маке- донска цивилизација. The locations which are connected with sustainable Панов, М. (1974). Сообраќајно-туристичка функција tourism development represent areas with preserved na- на Скопје. Географски видик, кн. 5. Скопје: Геог- ture and are rich in flora and fauna. Urbanization in this рафско друштво на СР Македонија. area is at a very low level. Canyon Matka has great char- Панов, Н. (2001). Туризмот и животната срединa. acteristics for implementing sustainable tourism devel- Географски разгледи, кн. 36. Скопје: Географско opment. This is a “monument of nature” and as such, друштво на СР Македонија. is regulated according to the applicable laws. The pro- Стојмилов, А. (2011). Географија на Република Ма- tected area has an authentic and unchanged eco system. кедонија. Скопје: Универзитет за туризам и ме- Small reconstruction, restoration and rehabilitation can наџмент Скопје. be made in the habitats. It is necessary to pay consider- UNDP. (2010). Студија за ревалоризација на природни- able attention towards not impacting the primary goals те вредности на заштитеното подрачје Споменик of the protected area with management through eco- на природата Кањон Матка. Retrieved September tourism. The constructions and physical modifications 16, 2016 from http://www.moepp.gov.mk/wp-con- are only allowed in order to give access to visitors and tent/uploads/2015/01/Studija-za-MATKA.pdf whenever possible, made by the materials from the sites UNWTO.(2004). Indicators of Sustainable Development which have minimum effects on the ecosystem and the Destinations. Madrid: World Tourism Organization.

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Resources as a Basis for Achieving Quality and Destination Competitiveness

The impact of the names of dishes on the guest’s choice of restaurant food

Dragan Tešanović , Abstract: Menus represent the written food offer in restaurants. They are a significant Maja Banjac, marketing tool that influences the guest’s choice and personal experience of Bojana Kalenjuk, food in the restaurant. The aim of this study is to perform research on the specific segments of the menu that affect the guest’s decision on food choice. Goran Radivojević The study will try to determine how the names of dishes that are associated with health, sentimentality and ethnic origin have an effect on the guest’s choice of food. It is considered that the menus that associate with the given University of Novi Sad, names are to appeal to guests even though they are similar to classic dishes. Faculty of Sciences, The research has been conducted in a la carte restaurants. Five menus, offer- Department of Geography, Tourism and ing the dishes made of the same ingredients but with different names, have Hotel Management, been offered for the research needs. The “classic” name has been given to Novi Sad, Serbia the specific dish and the same dish has been titled with “sentimental” name, “authentic” name, “national” name, “organic” or “healthy safe” name and the name that associates with “memory of a family”. The participants have marked the menu using the Likert scale (the most appealing 5 to the least appealing 1) without knowing that they have been grading the same dish. The data has been systematized and processed by means of descriptive statistics. The research results will show that the names of dishes have significant effects on the guest’s choice of food. The results should make the managers of the restaurants pay more attention to the names of dishes during the process of menu creation. Also, these findings should contribute to the improvement of the restaurants’ service.

Keywords: menu, restaurants food, hospitality, names of dishes.

LITERATURE REVIEW

The attractive descriptive names of restaurant dishes directly influence the consciousness and the guest’s personal experience before and after the consumption of the dishes (Carddelo, 1986; Vansink & Park 2002; Wansink, 2003). On the basis of what have been said, it could be noticed that the names of dishes besides their similar sensory characteristics more appeal to the guest than the dishes with classic names. This statement Correspondence: Maja Banjac could be confirmed by the finding that when the products made of offal had been launched to the American market and had not been given true e-mail: names, the demand for such products had largely increased until the true [email protected] nature of this product was not discovered (Wansink & Park, 2002). 169 Sitcon 2016 Doi: 10.15308/Sitcon-2016-169-173 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

In order to realize the plans of restaurant business, considerable influence on the consumers’ perception of it is important to create convenient menus for target consumption that in return can directly affect future in- group of guests (Tešanović, 2012). The creators of men- tentions. Also, the innovation means careful selection of us need to have knowledge of all elements important for the names of dishes. making the appealing and stimulating offer (Lončar & The topic of the study is the restaurant’s food cre- Lončar, 2004; Tešanović, 2011 p. 54; Ozdemir & Calis- ated in menus with different names of emotional nature. kan, 2014; Gagić, 2014; Kalenjuk et al., 2016). The sig- The composition of dishes in all the menus is the same nificant segment of planning is to monitor the theme of but the names of dishes in each menu differ. One of the the production and service of the restaurant (Morrison, menus has dishes with classical names and the rest of 1996; Jones & Mifli, 2001). It is believed that the names them have the names that associate with family, authen- of dishes have direct impact on both the guest’s person- ticity, nation and healthy and safe food. al experience and choice of food in the restaurant. The The task of the study is to determine whether the dishes that have descriptive names associated with fam- names of dishes impact the consumers. Also, the aim ily, nation, healthy and safe food and something authen- of the study is to explore the extent to which the names tic have more positive effects on the guest’s choice of of dishes in the menu affect the consciousness of the food than the dishes that have classical names. Creative customer deciding on the choice of food. and descriptive names of dishes increase the demand for these dishes (Wansink et al., 2001). Moreover, nu- RESEARCH METHODOLOGY merous studies confirm that the most attractive dishes regardless of their place in the menu are more likely to The place of the research be ordered (Lorenzini, 1992; Tešanović, 2011). Wansink et al. (2001) have conducted the study by replacing the dishes that have classical names with the The research was conducted during the period from same dishes giving them descriptive names. The survey January 01 to February 01, 2016 in Novi Sad. The restau- data show that the sales of dishes rose by 27% in relation rant of a la carte type has been chosen for the purpose of to the period when the dishes on offer had classic names. this research. It disposes of sixty-four table seats while the capacity utilization is 76% on a monthly basis. The study conducted in schools in New York in 2001 shows that the name of a dish affected the choice. The carrot that had the descriptive name had been twice as The participants much consumed compared to its offer with classical name (Wansink et al., 2012). The dishes with descrip- One hundred and forty six guests were randomly se- tive names have a hedonistic aspect and the name of lected. During the research realization, the participants the dish implies what might be expected from its taste were not given any information, apart from the task to (Wansink et al., 2004). choose the most acceptable menu. It is believed that the guests’ provoked sentimental feelings influence their perception of high quality dish. The menus The studies conducted in France show that the participants considered the food that had been consumed fifty Five expanded menus have been composed for the years ago far better compared to the food consumed purpose of the research and are presented in Table 1. nowadays (Mermet, 2010, p. 46). Moreover, a signifi- One of the menus has dishes with classic names and the cant number of participants considers the traditional names of dishes in other four menus are associated with food to be of more nutritional value and the meals to sentimentality, something authentic, nation, organic be more nutritionally balanced compared to the meals and healthy and safe food. we consume today (Sheehy et al., 2016). Also, there is The participants graded each of the menus using the the belief that food made of local ingredients is more Likert numerical and descriptive scale (1 to 5). The par- appealing, and thus its labeling in the menu can boost ticipants have marked the most appealing menu with sale (O’Kane, 2016). mark 5, mark 4 for the menu of average appeal, mark In the exclusive restaurants, one of the most cru- 3 for the menu that is neither appealing nor unappeal- cial business strategies is innovative offer in the menus ing, mark 2 for the menu that is partially appealing, and (Lane, 2013). It is believed that innovative approach has mark 1 for the least appealing menu. 170 Resources as a Basis for Achieving Quality and Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Table 1.

1. Restaurant’s 5. Organic/healthy 2. Sentimental menu 3. Authentic menu 4. National menu “classical” menu safe menu

Soup made of Grandmother’s Soup made of free Chicken soup Clear chicken soup Vojvodina’s farm yellow chicken soup range chicken chicken Grandpa’s The authentic Serbian traditional Traditional roasted traditional roasted traditional roasted Serbian roasted pork roasted pork mangalitsa pork pork

Šumadija’s country Mixed salad Sister’s mixed salad Classic mixed salad Organic mixed salad salad

Aunt Nena’s poppy Traditional poppy Banat’s poppy Strudel filled with Poppy strudel strudel strudel strudel organic poppy seeds

Statistical analyses of data as the most reliable statistical element. Table 2 shows the obtained data evaluation of all five menus. The marks of all participants are grouped and the results are analyzed by means of descriptive statistics: Table 2. minimum (min), maximum (max), the coefficient of MENU MIN MAX x σ CV variation (CV), a measure of standard deviation (σ) and average value ( x ). Classical 1 5 2.00 1.18 1.39

RESEARCH RESULTS AND DISSCUSION Sentimental 1 5 3.58 1.18 1.39

Authentic 1 5 3.29 1.23 1.52 Socio-demographic characteristics of the participants National 1 5 3.23 1.09 1.20 There have been one hundred and forty seven par- Organic/ 1 5 3.62 1.69 1.37 ticipants with an average age of 36.6 years. Accordingly, healthy safe 60.7% of participants were women and 39.3 men. 32.5% of participants have a high school degree, 20.5% of them Table 2 shows the average value of graded menus. have a college degree, 41% have a bachelor’s degree and The largest number of guests (26%) has chosen the first 6% have a master’s degree. menu as the most appealing with the organic/healthy For the purpose of this research and convenience of safe label with the average mark 3.62. It is believed that the participants, an important question has been deliv- the offered menu has been marked with the highest av- ered: “How often do you visit restaurants?” 10.8% of the erage value because the consumption of such food has participants have answered once a week, 42.2% once a become the growing trend all around the world (Baou- month and 47% several times a year. rakis, 2004) and there is growing concern of consumers Also, important information has been: “How long for their health as well. The participants consider the do you stay in the restaurant?” Namely, 15.7% of re- ecological food as something that is good, appealing and spondents said that they stay approximately one hour, tasty (Lessa et al., 2013), which leads to a more positive 74% answered one to two hours, and 9.6% said that they experience (Wansink et al., 2004). Also, it should take stay more than two hours. into consideration that simple prepared small meals have been consumed these days (Roseboro, 2016). Gaste et al. The analysis of menu selection (2015) confirm that various statements of nutrition have contributed to these results as well as the one that claims During the research, the participants express their that consumption of fruits and vegetables provides the opinions on the most and least appealing menu. For the prevention against cancer (Ledikwe et al., 2005). Since detailed analysis of data, the average value has been used the guests have been provided with alternatives when 171 Resources as a Basis for Achieving Quality and Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

selecting the menu, the effect of attractive food can be user demand. After that, during the formation of observed herein (Dojl et al., 1999). the offer, it is recommended to use the descrip- The average value of 3.58 of sentimental menu cat- tive terminology that will be understood by the egorize it as the average appealing menu. 24% of partici- guest. The studies have shown that the effect of pants have claimed this. The authentic menu is marked giving attractive names to dishes is the long last- with 3.29 and it is described as neither appealing nor ing one, not transient on (Wansink et al., 2012). unappealing by 23% of participants. The national menu ◆◆ In addition to the attractive and authentic offer that is marked with 3.23 is partially appealing and it has that restaurant places on the market by provid- been noticed by 16% of participants. The results of the ing authentic, national and sentimental names to study show that the names associated with sentimental- the dishes it also influences the preservation and ity, patriotism, and family influence the choice of dish- promotion of gastronomic culture and traditions es since they generate positive feelings of consumers. of the region. Each of these dishes has its own spiritual meaning in the ◆◆ The research results can contribute to better res- heads of consumers and it attributes particular flavor to taurant practice; if greater attention was paid to the dish (Žaper, 2004). However, it is very important the present topic, that would have direct impact to mention that the given names of dishes can invoke on all segments of the restaurant business. greater expectations that can lead to disappointment in the case they are not met (Richardson et al., 1994). The Acknowledgment menu that is noticed as the least appealing is the classical menu with the average value of 2.00 and only 11% This work is part of the research projects: III-46009 of participants have marked this menu as the most ap- and 46005 funded by the Ministry of Science and Tech- pealing. Generally speaking, the trends of restaurants’ nological Development of the Republic of Serbia. offer have been changed and the results of the study were expected. The classical menu is the least conveni- References ent to the guests and it is confirmed by recent studies on the changing needs of consumers (Tešanović, 2012, p. Baourakis, G. (2004). Marketing trends for organic food in 61). On the other hand, devastating data can be noticed the 21st Century. River Edge, NJ: World Scientific. in Vojvodina’s restaurants with only 3% of special offer Cardello, A., Mallero, O., Masor, H., Dubose, C., & Edel- (Kalenjuk et al., 2016), which applies to a very impor- menan, B. (1985). Role of Consumer Expectancies in tant segment of business (Gaste et al., 2015). the Acceptance of Novel Foods. Journal of food science, 50(6), 1707-1714. doi:10.1111/j.1365-2621.1985. tb10571. CONCLUSION Doyle, D., Connor, M., Reynolds, A., & Bottomley, D. (1999). The robustness of the asymmetrically dominated effect: On the basis of the research on the impact of names Buying frames, phantom alternatives, and in-store of dishes in the menu on the guest’s choice of restaurant purchases. Psychology and Marketing, 16(3), 225-243. food, the following conclusions could be drawn: doi:10.1002/(SICI)1520-6793(199905)16:3<225::AID- ◆◆ The menus that had words denoting memory of MAR3>3.0.CO;2-X family, authenticity, national characteristics, or- Gagić, S. (2014). Osnove ugostiteljstva. Novi Sad: Alfa-Graf. ganic/healthy safe in the names of dishes were Gase, L.N., Kaur, M., Dunning, L., Montes, C., & Kuo, T. more attractive to the guests in relation to the (2015). What menu changes do restaurants make after offer based on the dishes with classic names. joining a voluntary restaurant recognition program? Appetite, 8, 131-135. doi:10.1016/j.appet.2015.01.026 ◆◆ The most desirable foods were those that had Jones, P., & Mifli, M. (2001). Menu development and analysis in front of their name attribute ecological and in UK restaurant chains. Tourism and Hospitality Re- healthy safe, then the guests valued dishes with search, 3(1), 61-71. doi:10.1177/146735840100300105 sentimental names and then those with prefix Kalenjuk, B., Tešanović, D., Banjac, M., Gagić, S., & Radi- “national” while the same dishes with classic ti- vojević, G. (2016). Offer structure and design of the tles were in the last choice. menu in hospitality industry. Tourism & Hospitality ◆◆ This study confirms that when creating the menu Industry 2016, Congress Proceedings, (pp. 131-143). one of the important issues to be addressed are Retrieved September 6, 2016 from the names of dishes. To ensure that this potential http://www.fthm.uniri.hr/files/Kongresi/THI/Pa- is fully used, it is critical to make the analysis of pers/2016/THI_April2016_131to143.pdf 172 Resources as a Basis for Achieving Quality and Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Lane, C. (2013). Taste makers in the “fine-dining” restau- Roseboro, K. (2016). Certified! Fast growing non-GMO, or- rant industry: The attribution of aesthetic and eco- ganic, and fair trade trends create big opportunities. nomic value by gastronomic guides. Poetcis, 41(4), Retrieved September 6, 2016 from 342-365. http://digital.bnpmedia.com/article/Certi- Ledikwe, J., Blanck, H., Kettel Khan, L., Serdula, M., Sey- fied!/2502574/308292/article.html. mour, J., & Tohill, B.R. (2005). Dietary energy density Sheehy, T. (2015). Traditional food patterns are associated determined by eight calculation methods in a nation- with better diet quality and improved dietary adequa- ally representative United State population. The Jour- cy in Aboriginal peoples in the Northwest Territories, nal of Nutritional, 135(2), 273-278. Canada. Journal Of Human Nutrition And Dietetics, Lessa, K., Zulueta, A., Esteve, M., & Frigola, A. (2013). Study 28(3), 262-271.doi:10.1111/jhn.12243: of consumer perception of healthy menus at restau- Tešanović, D. (2011). Osnove gastronomije za menadžere. rants. Food Quality and Preference, 22(3), 37-46. Novi Sad: Prirodno matematički fakultet. doi:10.1016/j.foodqual.2016.05.007. Wasnik, B., & Park, S. (2002). Sensory suggestiveness and Lončar, D. & Lončar, M. (2004). Analiza i dizajn jelovnika labeling: do soy labels bias taste? Journal of sensory (menija) kao važan faktor unapređenja prodaje ugos- studies, 17(5), 483-491. doi:10.1111/j.1745-459X.2002. titeljskog objekta. Turizam, 8, 107-109. tb00360.x. Lorenzini, B. (1992). Menus that sell by design. Restaurants Wansink, B., Cheney, M., & Chan, N. (2003). Exploring and Institutions, 102(7), 106-112. comfort food preferences across age and gender. Mermet, G. (2010). Francoscopie. Paris: Larousse Editions. Physiology & Behavior, 79(4-5), 739-747. Morrison, P. (1996). Menu Engineering in Upscale Restau- Wansink, B., Painter, J., & Ittersum, K. (2001). Descriptive rants. International Journal of Contemporary Hospi- menu labels’ effect on sales. Cornell Hospitality Quar- tality Management, 8(4), 17-24. terl, 42(6), 68-72. doi:10.1177/0010880401426008. O’Kane, G. (2016). A moveable feast: Contemporary rela- Wansink, B., Ittersum, K., & Painter, J. (2004). How tional food cultures emerging from local food net- diet and health labels Influence taste and satiation. works. Appetite, 105, 218-231. Journal of food sience, 69(9), 340-346. doi:10.1016/j.appet.2016.05.010 doi:10.1111/j.1365-2621.2004.tb09946.x Ozdemir, B., & Caliskan, O. (2014). Review Article: A re- Žaper, A. (2004). Culinary art - part of culture of life and view of literature on restaurant menus: Specifying the spiritual heritage in Croatian tourist supply. Naše managerial issues. International Journal Of Gastron- more: znanstveno-stručni časopis za more i pomorstvo, omy And Food Science, 22(6), 23-13. 51(5-6), 227-238.. Richardson, P., Dick, A., & Jain, A. (1994). Extrinsic and intrinsic cue effects on perceptions of store brand quality. Journal of Marketing, 58(4), 28-36. doi:10.2307/1251914

173 Resources as a Basis for Achieving Quality and Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Resources as a Basis for Achieving Quality and Destination Competitiveness

HUMAN RESOURCES MANAGEMENT IN HOTEL INDUSTRY: THE ANALYSIS OF CURRENT PRACTICES IN SERBIA

Svetozar Krstić Abstract: Human resources management (HRM) in the hotel industry, especially in large hotel chains, has rapidly developed in the last few decades, by means Belgrade Chambre of Commerce of modern HRM assets. Today, a wide range of measures is being used in Belgrade, Serbia HRM, aimed at career development, such as systems of vocational trainings, rewarding incentives, and the promotion of healthy working environment, with stress minimization in the workplace. The importance of HRM in the hotel industry is constantly growing. Hotels have an important role to attract, engage and maintain top talents, by redefining working environment and creating stimulating work ambiance. Efficient HR managers also have to be familiar with constantly changing business practices and tendencies. This study presents the comparative analysis of HRM practices in Serbia in 2015, according to the Cranet research, and the HRM practice in the hotel industry, conducted by the author in 2015, encompassing twenty hotels in Serbia. It also comprehends the most important cases of practice in hotel chains worldwide.

Keywords: hotel, HRM, employee, hotel industry.

Introduction

One of the most important challenges of hotel chains worldwide is the constant promotion of HRM. The task is challenging not only because of the size and various locations of hotel chains, but also because of different regulations, customs and culture in regions worldwide. Some hotels implement large hotel chains standards and best practices of HRM through franchise agreements and relations. Despite the fact that the relationships with employees are not, in this case, the responsibility of hotel chains franchisors, but of particular hotels, which are in that case franchisees, large hotel chains franchisors often insist on detailed determining of obligations related to good HRM practices. These obligations are related to the employee promotion, permanent training system, rewarding and recruiting system etc. Franchisors provide support through trainings and similar education events that employees attend in franchisors’ schools, Correspondence: which counts among the most important forms of support to business Svetozar Krstić development and promotion.1 e-mail: 1 Review of socially responsible HR practice and labor relations in international [email protected] hotel chains, ILO 2008 174 Sitcon 2016 Doi: 10.15308/Sitcon-2016-174-180 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

The employee structure in the hotel industry is more deliver a quality product – and we need the right poli- complex compared to other sectors, since hotels employ cies, programs and partnerships in place to ensure that not only the staff with definite and indefinite duration the workforce of the future knows about the opportu- of agreements and full-time and part-time employees, nities in our sector, and has the appropriate skills and but also a large number of seasonal workers, appren- knowledge to support future growth. In the years to tices, contract workers etc. All of them need to do their come, progress in developing and retaining talent will jobs in a highly professional manner in order to avoid require a much stronger and more coordinated effort the divergence of standards and quality level, and thus between the private sector, educational establishments have to be included in the training system. Precisely, and government” (WTTC, 2015, p. 1). the readiness of hotel chains to educate and train entire staff presents the evidence of HRM effectiveness. The The Current Practice Of Human Resources fact that IHG group operates in more than 100 countries 2 and manages over 5000 hotels , Marriot in 87 countries Importance of human resources in vision, mission 3 managing 4500 hotels , and Hilton in 104 countries with and principles of businesses 4700 hotels4, illustrates the complexity of good management practices. International hotel chains transparently publish their The strategic importance of HRM is reflected pri- visions and missions, in which as a rule they emphasize marily in understanding and insisting on the impor- the importance of the staff and their active role in the tance of people and their potential in the constantly achievement of company’s goals. In this context, Hilton changing world, as well as the acknowledgment of their iScandic refers to their employees as team members, key contribution in gaining competitive advantages of Mandarin Oriental as colleagues, while Marriot, Star- the hotel. This advantage can only be provided by tal- wood and Hyatt talk about their associates (Boardman ented employees and consequently, the most important & Barbato, 2008, p. 22). role and objective of HRM is to attract such employ- Innovative vision of Marriot chain, responsible for ees, develop their potentials and keep them, in order the global success of the company, is based on the slogan to increase competitiveness and preserve competitive “Spirit to Serve”. They foster the working environment advantages. in which employees are truly valued, which results in ex- HRM is a relatively inexpensive function and does traordinary service level and profit increase. In Marriot, not require large resources for development. It signifi- success starts with employees, and thus, the employer cantly affects the return on investments and enables an makes sure they have all necessary tools and trainings increase of added value of business operations in each to constantly develop. Employee dedication is rewarded organization. The role of HRM is to follow and analyze with compensations, promotion possibilities and other the organization and its jobs, integration in cultural sys- benefits. Spirit to serve is based on a fixed condition that tem, goal achievement, as well as to initiate and imple- people are the core value of the company. Employees ment changes and promotions when needed. work in the environment that supports their develop- Global Talent Trends and Issues for the Travel and ment, the employer takes good care of the staff, which Tourism sector, 2015, points out, for the first time, the is in return ethical and trustworthy. Workplace feels like problem of shortage of talented workers in tourism and home, working environment is friendly, and the rewar- travel sector, including the hotel industry. The research ding system recognizes the importance of employees has shown that this sector is facing, on the global level, and managing staff5. the annual deficit of 14 million jobs. The research has Employees have the crucial role in defining and achie- also shown that the sector of travel and tourism faces ving the vision, values, missions and principles of hotel significant problem of lack of talents, more that in the chain business operations. For this reason, the leading economy as a whole. This study predicts a lack of talents hotel chains determine a set of policies which present the in 6 out of 46 countries in the next 5 to 10 years (WTTC, globalization tool in HRM. These policies concern human 2015, p. 1). rights, equal opportunity and diversity rights, harassment The President and CEO of the World Travel and prohibition etc. Most of the hotel chains worldwide de- Tourism Council, Mr. David Scowsill emphasizes: „We termines and brands their own HRM programs, which are a people industry – we depend on quality people to present tools that accelerate goal achievement both re- 2 www.ihg.com gionally and globally. 3 www.marriot.com 4 www.hiltonworldwide.com 5 www.mariot.com 175 Resources as a Basis for Achieving Quality and Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Shangri-La has created training programs called workers (in more than 50% cases). The most frequently “Care”. All new staff undergo the modules within six used methods are recommendations and internet and months of joining the group. Employees gain the skills newspaper ads. The most frequently used method for needed to “turn passion into a success”6. management recruiting is the Internet (over 30%). As According to Cranet research (Leković et al., 2015, regards skilled workers, the most popular extern source p. 28) 7, most of the surveyed organizations possess the of recruiting is National Employment Service, followed written statement on mission, vision and business stra- by internet ads and standing job advertisement. For ad- tegy. Approximately 60% of companies have formula- ministrative and manual workers, besides already stat- ted the general HR strategy, while half of the surveyed ed, extern methods, newspapers ads are also frequently companies have the partial HR strategy. used. Public networks, as an innovative recruiting meth- According to the research conducted by the author, od, are being used only in 10-15% of hotels, depending out of 20 surveyed hotels, only three have stated com- on the employee category. panies’ objectives on their websites. They communicate Author’s research related to the recruitment practic- with the community and future guests and clearly affirm es examined the most frequently used recruiting sourc- that their objective is guest satisfaction. They also comes, their utility assessment and effectiveness. Less than mit themselves to providing the highest possible level of a half of respondents have a recruitment plan (43%). services. The rest of hotels (17) do not state their vision While recruiting, they dominantly cooperate with edu- and mission on their websites. cational institutions, and the Internet. When assessing Such attitude towards the expression of hotels’ mis- the utility of each recruitment source, the respondents sion and vision shows that hotel managers are not aware consider the Internet the most useful asset (average rank of the importance of the link between the mission, vi- 1.45), followed by other sources (1.75) and the coopera- sion and employees’ achievement of objectives. Under- tion with educational institutions (1.77). According to standing and accepting the mission and vision by all the results, advertising in newspapers and professional the employees present one of the key pillars of efficient journals is far less useful (average ranks 3.88 and 4.56, HRM, since it shows the most important strategic ori- respectively). According to Cranet survey, the most used entations of the hotel and the basis for construction of recruitment methods in Serbia are recommendations organizational culture. Visions and missions also articu- and newspaper and internet ads. late core system values that should be promoted by the Strategies used in recruiting are: the creation of da- organization and its members. tabase of candidates (based on experiences with can- According the assessments of twenty hotel manag- didates that have accomplished vocational trainings, ers, the main challenge HRM is facing in hotel industry candidates applied via the Internet and candidates with is related to the methods of recruiting and selecting the recommendations), selection of candidates with best re- appropriate working force (especially middle skilled sults on vocational trainings, and recommendation of staff), which is ready to learn and accept innovations colleagues and probation results. Only 38% of respond- in order to provide high level quality services to guests. ents conduct the evaluation of recruitment effectiveness. Other important issues for HRM are the investment in employees, trainings, teamwork fostering, and ac- Selection knowledgement of the importance of communication, According to Cranet survey (Leković et al., 2015, p. employee motivation, and adequate choice of jobs ac- 28), special attention is paid to individual interviews (this cording to employee skills. method is used in 60% of organizations) and recommendations (more than 50%) in the process of selection of Recruiting managers and skilled workers. In addition to individual According to the conclusions of Cranet survey (Leko- interviews, filling out application forms is also important vić et al., 2015, p. 28), majority of surveyed organizations while selecting administrative staff and manual workers prefer intern recruiting for managerial and expert posi- (the method is used in 60% of organizations). A small share of the observed organizations disposes of special tions, as well as for administrative positions and manual 6 www.shangrila.com action programs for hiring specific categories of workers. 7 Cranet research comprehends 158 organizations, 2/3 from Author’s survey conducted in hotel organizations shows private and 1/3 from public sector. When it comes to sector that the HRM selection instrument is used in all of the structure, 1/3 of surveyed organizations belong to manufacturing sector and 2/3 to the service sector. Approximately 60% surveyed organizations. There is a high uniformity in of participants belong to SME sector. types and intensity of used selection methods. 176 Resources as a Basis for Achieving Quality and Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Figure 1. Utility of recruiting sources expressed through the average rank

There are differences within the selection process, per year. Managers in public sector spend more than 5 while hiring for managerial and executive positions days on different types of trainings, while administra- (71%). These differences refer primarily to the content, tive and manual workers are being trained less than 4 and less to the types of methods. days every year. Besides the number of days spent on trainings, the measurement of training efficiency is an Training and development important indicator as well. In most of the organizations, informal feedback is being used. In addition, most Cranet research shows that when it comes to the em- of our organizations measure the achievement of goals ployee training, in most of the surveyed organizations, set in the training plan. More objective methods, such as average share of training costs is 2.68% of total annual measurement of participants’ performance before, im- training costs, which proves a modest importance of mediately after and a month following the training, or trainings in Serbian companies. In private sector, more the return of investment are not often used (Leković et important amounts are allocated for employees’ train- al., 2015, p. 29). The research also shows that only half of ings (2.86%), compared to public companies (2.32% of respondents have elaborated plans for employee train- total salary costs). In the surveyed public companies, ings. If they have plans, they refer to the acquisition of an employee spends six days per year on trainings. In specialized knowledge related to the hotel industry (2), private companies, managers are trained for more than training programs for middle position employees (1), 7 days per year, skilled staff almost 7 days and adminis- internal trainings for newly employed staff (1), commu- trative and manual workers more than 5 days. In pub- nication trainings (1); and crisis resolving (1). Even if lic sectors, the greatest attention is given to the educa- the trainings are mandatory for all employees, only 43% tion of skilled staff, with nearly 6 paid days of training of respondents evaluate the acquired knowledge.

Figure 2. Selection methods 177 Resources as a Basis for Achieving Quality and Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Fluctuation

Cranet research shows that the average employee fluctuation in Serbia, according to the analyzed companies, is 6.59%. In private sector, fluctuation is 7.68%, while in public sector it amounts to 4.48%. Employee fluctuation rate is above acceptable in all of the surveyed organizations (over 5%) (Leković et al., 2015, p. 9). 57% of analyzed fluctuations are between 6 and 10% while it amounts to 16-20% in 22 cases. Those data clearly show that the fluctuation rate in the hotel industry is higher Figure 3. Evaluation of acquired knowledge than average and that there is a need to carefully analyze and eliminate the reasons of such high fluctuation rate. Evaluation Half of the respondents do not perform exit interviews, which additionally disables the detection and elimina- Cranet research shows that most of the organization of causes. tions formally evaluate the employee performance. In The most common reasons for leaving the organi- approximately 80% of the surveyed organizations from zation are: new job or self-employment (average rank private sector, formal evaluation methods exist for the 1.85), the expiry of contract (average rank 2.79) and job evaluation of managers, skilled staff and administrative dissatisfaction (average rank 2.86). and manual workers. The share is smaller in public sec- The development of employees’ career presents a very tor, where 75% of skilled workers are being evaluated, important HRM activity. According to Cranet research, while the performance of administrative and manual most of the companies do not use modern techniques workers and managers is evaluated only in 60% of the for employee career development, such as development surveyed organizations. In the majority of surveyed or- centers, fast promotion schemes or international work- ganizations, evaluation of work results is carried out by ing arrangements. More than 40% of respondents use direct supervisors. Supervisors’ superiors are engaged mentorship and trainings. in this process only in 1/3 of surveyed organizations. The appropriate multilateral evaluation exists only one In contrast to the rest of the economy, according out of five of the surveyed companies, and these cases to this research conducted among hotel companies, are related to managerial positions. As regards skilled the majority of respondents are aware of the problem and administrative/manual staff, subordinates and col- of employee fluctuation. 77% of them have created in- leagues provide performance feedback in less than 10% centive programs, designed with the aim of keeping the of cases. In the surveyed organizations, performance re- employees. The most common method in this context sults of management system are used as inputs for com- is offering promotion possibilities. pensation, training and career development systems. In private sector obtained data are used considerably Conclusion more (approximately 80%) than in public organizations (approximately 50%) (Leković et al., 2015, pp. 28-29). Human resource management is a very significant Research conducted in hotels in Serbia shows that pe- segment of the hotel industry and its importance is con- riodical performance evaluation is being conducted in stantly growing. Hotels have a very important task to 71% of hotels, while 64% of employees are familiar with attract, engage and retain top talents, through redefining the reasons, goals and terms of evaluation process. Ac- of working environment, and creation of stimulating cording to the estimation of respondents, the greatest working environment. Effective HR managers have to importance of evaluation reflects in feedback on the keep pace with business practices and tendencies, which accomplished task (average rank 2.15), in determining are constantly developing in order to increase the level appropriate employee wages (average rank 2.46) and as of employee efficiency and effectiveness, with the aim the basis for promotion or demotion of employees (av- of creating competitive advantages in the hotel market, erage rank 2.50). It is interesting that the performance which is getting more demanding each day. Cranet re- evaluation is not seen as an important instrument for search, which was conducted in 2015 among 20 hotels, the evaluation of trainings attended by employees (aver- has showed that the HRM practice in Serbia is more age rank 6.00). than similar. Due to the importance of human resources 178 Resources as a Basis for Achieving Quality and Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Figure 4. Estimation of evaluation importance

Figure 5. Evaluation of acquired knowledge

Figure 6. Incentive programs for keeping the employees 179 Resources as a Basis for Achieving Quality and Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

in providing specific hotel service and increasing com- Leković, B., Slavić, A., & Berber, N. (2015). Praksa uprav- petition in the hotel market, hotel managers pay greater ljanja ljudskim resursima u Srbiji - 2014/2015: attention to trainings, development and incentive pro- Izveštaj Cranet istraživanja. Retrived August 1, grams in order to retain human resources, compared to 2016 from http://www.ef.uns.ac.rs/cranet/down- other economic activities in Serbia. load/Cranet_2015_Srbija_izvestaj.pdf Shangri-La. (2014). Case 24 Shangri-La Hotels. Retrived References August 1, 2016 from http://documents.mx/documents/shangri-la-558447708773f.html Boardman, J., & Barbato, C. (2008). Review of socially WTTC. (2015). Global Talent Trends and Issues for the responsible HR practice and labor relations in inter- Travel and Tourism Sector. Retrived August 1, 2016 national hotel chains. Retrived August 1, 2016 from from http://www.wttc.org/-/media/382bb1e90c374 http://www.ilo.org/wcmsp5/groups/public/--- 262bc951226a6618201.ashx ed_dialogue/---sector/documents/publication/ wcms_162286.pdf

180 Resources as a Basis for Achieving Quality and Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Resources as a Basis for Achieving Quality and Destination Competitiveness

Budgeting process in tourism companies for the purpose of improving the quality of tourism products

Danica Vuković Abstract: Deciding on a travel agency’s budget is a highly complex task. Budgeting process in the travel agency is directly linked to the planning process, which needs to Singidunum University, PhD candidate, improve the decision-making process through formalization of the planning Belgrade, Serbia process. Travel agency’s objectives and methods for meeting those objectives are defined in the planning process, starting from the internal and external factors that are of particular importance when making a series of decisions in the process of strategic and operational planning. When formulating general budget, the rational aspect of decision-making predominates when it comes to the quality improvement of a tourism product, although other decision- making aspects are implemented by an agency in accordance with its financial and human resources, and time as a resource, should not be ignored. Scientific decision-making requires greater financial resources. There is also intuitive decision making in case the agency performs an independent assessment of the market, relying on its previous business experience. In the final phase of the general budget formulation, new decisions are made based on the budgeted balance sheet, which determines further business policy of the agency, no matter if the proposed budget will be accepted or revised.

Keywords: budgeting, planning, quality improvement, general budget, management.

Introduction

The budget is a financial plan which covers a specific period of time, while the budget development process is called budgeting. Budgeting is used as a “forecasting technique, planning and control instrument.” Budgeting process includes three phases: planning, control and audit (Stanišić & Radović, 2011, p. 2). Decision-making is the beginning of the activities of every manager in tourism sector. There are different forms of decision-making in the management. They can be viewed from several aspects, holders or participants in the decision-making, depending on the facts available at that particular moment of the decision-making process, so we distinguish the following (Zečević & Nedeljković, 2000, p. 54): Correspondence: Danica Vuković ◆◆ From the standpoint of methods: intuitive, rational and scientific decision-making e-mail: ◆◆ From the standpoint of the number of participants: individual and [email protected] group decision-making. 181 Sitcon 2016 Doi: 10.15308/Sitcon-2016-181-186 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

GENERAL BUDGET form of group decision-making. The advantage of such decision-making lies in better overall knowledge and Nowadays, there are different definitions of deci- top quality decision-making, while the disadvantage sion-making process. For a large number of authors, the lies in denying their own responsibility and the need decision-making process includes the problem solving of an individual to be in agreement with others, which process with the aim to execute an action. The key ele- may delay the decision-making process. The second ment of decision-making process is a choice between procedure is that a top manager, without consulting possible alternative activities (Kickert, 1980). The choice subordinates, drafts the general budget. The case of can be made through a systematic approach to the de- individual decision-making is rare in practice and im- cision-making process. It involves the application of plies the increased level of risk and responsibility. The different rules and decision-making techniques, which achieved business result is recognised through the com- are based on a set of methods and procedures essential parison between the current balance sheet and income for problem solving, such as diagnostic and simulation statement that covers the same period of the previous techniques. In addition, decision-making skills are sig- year. The rate between the two aforementioned shows nificant too, which represent the effective use of knowl- whether the trends and developments that existed in the edge in practice. economy are still present and whether there has been A company’s management should successfully fore- a positive change or stagnation in business. The com- cast future conditions under which the company will parison and analysis of these two statements, as well as operate. Planning future actions in a quantitative man- drawing conclusions based on them, fall within the do- ner is done by drafting the general budget. Daily opera- main of rational decision-making. tional issues preoccupy management, thus drawing their The main budget of the tourist agency in our case attention from future targeted activities to the current is prepared monthly, while the budgeted balance sheet business operations. Budgeting opposes this tendency is prepared quarterly. The balance sheet at the end of making the planning process an explicit responsibility the accounting period, given in the table below, is the of the management. foundation for general budget preparation: The planning phase includes the collection of necessary data defining the goals for a certain period of time. Travel agency Control or monitoring phase includes the comparison Balance sheet as of June 30, 2015. between the planned and actual revenues and expenditures. The budget audit is done at the end of the year, Active Passive

indicating the positive and negative aspects of the cur- Cash € 100.000 Suppliers €200.000 rent budget and creating a high-quality analytical basis Calculated Customers 150.000 for the new budget draft. income tax to 100.000 pay on July 15 The general budget consists of a number of budgets Supplies 100.000 which jointly express planned activities of the company. 2015. The number and preparation of the budget included in Equipment 500.000 Ordinary shares 400.000 the general budget depend on the size and complexity Accumulated (100.000) Retained 50.000 of the company. The general budget typically includes depreciation earnings operational and financial budgets (Čerović & Spasić, Total € 750.000 Total € 750.000 2013, p. 222). Operating budgets are: sales and service revenues budget, production budget, budget required for raw materials procurement, production and sales operating budgets cost budget, administrative cost budget and marketing budget. Financial budgets include balance sheet and in- Sales revenue budget come statement budget, cash flow budget and investments budget (capital budget). The first segment of the general budget drafted in the The mere preparation of the budget of tourism or- company is a sales revenue budget that affects further ganization for the purpose of improving the quality of budgeting segments and is the basis for the next phases tourism products should be centrally managed. Budget of budget drafting. The budget drafting starts from the commission consisting of either department heads or sales forecasts. Therefore, sales budget arises from the other senior executives usually deals with it, and is a forecasted sales volume, the capacity of the company 182 Resources as a Basis for Achieving Quality and Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS itself, the forecasted sales costs (e.g. advertising cam- Budget cost of sales paigns). As the application of forecasting involves the use of mathematical and statistical methods, includ- Production and sales costs may be forecasted on the ing the use of information technology, drafting of the basis of the sales plan. There is a tie between the sales budget is a form of scientific decision-making. Depend- volume and sales cost budget, which is reflected in the ing on the business policy and available resources, the fact that the sales budget is often corrected, if it turns out company may prepare the budget either independently that the sales cost volume is inadequate. This is a form of or through a specialized company and conduct research rational decision-making, only the number of alterna- of public opinion, market and market evaluation. In tives is reduced, because this budget is conditioned by case the company lacks resources to carry out scientific the previous ones. methods when drafting sales budget, it relies on sales budgets from the previous period. It could be said that it is a form of intuitive decision-making, because it pri- Travel agency marily relies on the previous experiences. The budget cost of sales for July, August and September 2015.

The sales budget formulation based on rational de- July August September Total cision-making, starting from the achieved level of sales volume in June, as shown in table below, comes after the Budgeted sales value € 250.000 € 220.000 € 250.000 € 720.000 completion of the sales forecasting phase through the application of scientific methods. Provision of sales as a percentage 10% 10% 10% 10%

Provision of sales in € 25.000 € 22.000 € 25.000 € 72.000 Budget travel agency sales dollars July – September 2015 Manager’s salary 5.000 5.000 5.000 15.000 Month Quantity Price € Total € Total cost of sales € 30.000 € 27.000 € 30.000 € 87.000 June 30.000 10 300.000

July 25.000 10 250.000 Budget of general and administrative costs August 22.000 10 220.000

September 25.000 10 250.000 The budget of general and administrative costs de- October 20.000 10 200.000 pends, among other things, on the planned sales volume, which facilitates the decision-making process. However, it should be emphasized that the costs also depend on Procurement budget other factors, such as the company’s business policy or environmental influences (e.g. inflationary movements). All other budgets after the sales budget have depend- In this case, rational decisions are made based on the ent items. The aim of procurement budget is that the analysis of all impact factors. Such decision usually falls company has enough, but not too much, goods and ser- within the competences of general services manager. vices in order to avoid the “freezing” of liquid assets. On The budgeting starts from the presumptions that an- the other hand, making a profit is crucial, but at the same nual administration earning is € 120,000 and equipment time, having the minimum required stock is necessary. depreciation is € 60,000. In dealing with this problem, the company is guided by previous experience, not in terms of intuition, but the analysis. By rational decision-making, the one analyzes Travel agency The budget in general and administrative expenses for July, previous businesses, makes a diagnosis and reviews alter- August and September 2015. natives, and ultimately, finds the optimal solution. Sep- July August Total The budgeting starts from the following presump- tember tions: the number of inventory units at the end of the Earnings ad- € 10.000 € 10.000 € 10.000 € 30.000 month is in the amount of 80% of the planned sales for ministration Equipment the next month, and the budgeted procurement costs € 5.000 € 5.000 € 5.000 € 15.000 per unit amounted to € 5. depreciation 183 Resources as a Basis for Achieving Quality and Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

financial budgets In this case, the company’s management plans to purchase equipment in August in the amount of € 100,000, Capital expenditure budget which will be covered by the cash budget.

One of the requirements for the company’s devel- Cash budget opment and prospects is continuous accumulation and investment, no matter if it comes to the construction of Cash flow budget is drafted on the basis of previ- new or reconstruction and modernization of the existing ous budgets. A key decision is to determine the amount capacities, which achieves higher production, raises the of cash at the company’s disposal at the beginning of quality of business, gains new products, increases pro- the month, which should be provided. This amount is ductivity, shortens the production time, reduces pro- determined on the basis of previous experience by deduction costs, achieves higher profits and employs new termining the amount of money circulating within the staff. Capital expenditure budget falls within long-term company. All other budget items are fully dependent on budgets, and therefore, relies less on the general budget, the previously prepared operating budgets and capital and more on the development prospects of the company. expenditures budget. This budget enables the manage- Thus, drafting of this budget requires scientific decision- ment to plan in advance the loan value to cover the pos- making. Usually, the company drafts the budget by itself sible lack of cash. or by another company that monitors market trends and In the case of our travel agency, the cash budget is assesses investment viability. planned as follows:

Travel agency The cash budget for July, August and September 2015.

July August September

Opening balance of cash € 100.000 € 100.000 € 100.000

Profit in cash from customers 275.000 235.000 235.000

Total € 375.000 € 335.000 € 335.000

Operating expenses in cash

Payouts € 200.000 € 113.000 € 122.000

Sales commissions 25.000 22.000 25.000

Manager’s earning 5.000 5.000 5.000

Administration 10.000 10.000 10.000

Income tax paid 100.000

Dividends 10.000

Bank loan interest rate 650 907

Procurement of equipment 100.000

Total operating expenses € 340.000 € 260.650 € 162.907

Situation € 35.000 € 74.350 € 172.094

New bank loan 65.000 25.650 0

Repayment of bank loan 72.093,5

Closing balance of cash € 100.000 € 100.000 € 100.000

Loan balance at the end of month € 65.000 € 90.650 € 18.557

184 Resources as a Basis for Achieving Quality and Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

The budgeting starts from the following presump- Budgeted balance sheet tions: initial cash balance is € 100,000, 50% of sales in the previous period was cash sales, and the remaining Although the decision-making level decreases in the 50% was credit sales, the profit of the loan is expected in final phases of the general budget development - budg- the following month, the dividends for August amount eted statements on income and balance sheet, the same to € 10,000 and bank loan interest is 1% per month. could not be said for the phase of the company’s budgeted activities implementation. After the general budget June July August September has been drafted, the task of the company’s management Planned reali- € 300.000 € 250.000 € 220.000 € 250.000 zation is to, by rational and efficient decision–making, provide guidance and harmonisation of real business operations % credit sales 50% 50% 50% 50% of the company’s functional parts with its budgeted ac- Amount of € 150.000 € 125.000 € 110.000 € 125.000 credit sales tivities. % cash sales 50% 50% 50% 50% In this case, positive operating results are expected Amount of cash in the future, which can be determined according to the € 150.000 € 125.000 € 110.000 € 125.000 sales following budgeted balance sheet: Cash profit € 275.000 € 235.000 € 235.000

Travel agency Budgeted income statement Budgeted balance sheet on September 30, 2015. Assets Liabilities Budgeted Income Statement summarizes the impacts of previous budgets. There is no decision-making Cash € 100.000 Suppliers € 105.000 at this phase, the statement presents the facts. Decisions Customers/ Deferred clients 125.000 income tax 90.577,4 in the budget have their own course of development in a Inventories 80.000 Bank loan 18.557 manner that the most important decisions are made at liabilities Ordinary the beginning of drafting the general budget, and as the Equipment € 600.000 shares € 400.000 budget develops, the required level of decision-making Accumulat- ed deprecia- (115.000) Retained 175.866 reduces, since it is moved on the techniques and effects tion earnings of the decisions made. Once this procedure has been Total assets € 790.000 Total liabili- € 790.000 completed, it is necessary to check whether the settings ties are logical. Real business should be aligned with the drafted budget. Control, as part of the decision-mak- CONCLUSION ing process, is present in this phase, which indicates whether there is a need for audit, i.e. the correction of All of the aforementioned decision-making forms operational budget. The audit, like the general budget are present in everyday business management practic- development, starts from sales balance, reviewing the es. In the broadest sense, their role is the achievement investment decisions. of business objectives. In order to realize those objectives, the management of a company must, among other Travel agency things, carefully plan activities and forecast future con- Budgeted Income Statement for three months ending ditions in which the company will operate. Budgeting with September 30, 2015. is defined as management’s quantitative expression of Sale € 720.000 plans for the forthcoming period. Cost of sale 360.000 Different forms of decision-making on the general Gross profit € 360.000 Operating expenses: budget of the tourism organization for the purpose of Commissions from sales 72.000 improving the quality of tourism products are encoun- Salaries of employees in sales 15.000 tered in various phases of budget development. How- Earnings administration 30.000 ever, it could be said that rational decision-making plays Equipment depreciation 15.000 the key role in this business segment. Other forms of Interest expense 1.557 decision-making, which the company applies in accord- Income before tax on turnover € 226.444 ance with its financial and human resources, includ- Income tax expense 40% 90.577,40 ing time as a resource, should not be neglected. Scien- Net income € 135.866 tific decision-making, which includes the application of 185 Resources as a Basis for Achieving Quality and Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

mathematical and statistical methods and information References technologies, requires more funds. On the other hand, some kind of intuitive decision-making is present in Čerović, S., & Spasić, V.(2013). Ekonomsko-finansijska case the company evaluates the market on its own rely- analiza poslovanja preduzeća u hotelijerstvu i turiz- ing on the previous business experience. Various forms mu. Beograd: Univerzitet Singidunum. of decision-making are present in the final phase of the Kickert, W.J.M. (1980). Organisation of Decision Ma- general budget, when new decisions are made on the king: A System-Theoretical Approach. Amsterdam: North Holland Publishing Company. basis of the budgeted balance sheet, which determines the further business policy of the company, i.e. whether Stanišić, M., & Radović, N. (2011). Operativno budžetira- nje i kontrola sa aspekta poslovanja hotelskog pre- the proposed budget will be accepted or audited. duzeća. Strategic management: international journal of strategic management and decision support systems in strategic management, 16(2), 1. Zečević, M., & Nedeljković, D. (2000). Menadžersko od- lučivanje. Beograd: Fakultet za internacionalni me- nadžment.

186 Resources as a Basis for Achieving Quality and Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Resources as a Basis for Achieving Quality and Destination Competitiveness

Destination branding: A case study of national parks in Montenegro

Marija Janković1, Abstract: Destination branding is a complex and lengthy process that requires the 2 Milena Bokić definition of the concept of branding, planning and implementation, with interconnection and compliance of all steps, starting from market research, through development of identity and image, evaluation branding strategy to 1Mediterranean University, monitoring and auditing. Tourism in national parks is one of the fastest growing Podgorica, Montenegro market segments of tourism demand in the global market. This paper deals 2Singidunum University with the improvement of development of national parks from the perspective Belgrade, Serbia of Montenegro as a destination brand. The natural heritage of each country’s national parks occupies the special place. In Montenegro, national parks have the prospects and potential for developing different forms of tourism, recreation, excursions, sports and recreational tourism in the water (Black and Skadar Lake Biograd), to winter tourism (Lovćen, Durmitor, Bjelasica).

Keywords: brand, tourism, national parks.

Introduction

Branding plays an important role in the process of carving a long- term niche for a tourism destination, directly affecting its development. Hence, in case of a national park, this role is of a special kind, due to the characteristics and peculiarities of the destination itself. It is of vital importance to invest in national and international tourism taking into account the fact that about 1.350.000 people came in Montenegro in 2014 as tourists (WTO, 2016). In the modern world, tourism destinations tend to constantly develop more and more services for tourists. The way in which a particular destination gets to be represented in the minds of tourists stands out as the primary reason for choosing one particular destination over another and it can be directly used in the process of anticipating the steps that business rivals are about to take and establishing free space in the market available for a particular product of a destination (Popesku, 2008). Tourism destination represents more or less rounded geographic entity that has attractive, communicative and receptive factors, i.e. all the natural, social, anthropogenic, cultural and historical, traffic and requirements for accommodation, food, vacation, recreation and amusement Correspondence: Marija Janković of tourists (i.e., built-tourism offer) (Bakić, 2005). The classified natural sights attract attention of a majority of modern tourists. In the tourism e-mail: sector, the most important kind are probably national parks. Besides [email protected] them, it is necessary to mention a number of existing natural reserves, 187 Sitcon 2016 Doi: 10.15308/Sitcon-2016-187-191 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

natural parks, natural monuments, areas of wilderness, ◆◆ Rafting, kayaking and cycling-mountain bike as well as the classified natural attractions of global ◆◆ Extreme sports and recreational fishing significance-the biosphere reserves and the world herit- ◆◆ Ethno tourism, speleology and photo-safari age sites. The correlation between the classified natural ◆◆ Festivals and wine routes sights and tourists has grown that strong that the con- ◆◆ Restaurants and national cuisine. cept of environmental protection in tourism has been The main aim of visitor information centers is raising introduced. Some states have established new classified the awareness and informing the visitors on the classi- natural sights, national parks, so as to preserve those off fied areas in Montenegro, presenting natural and cul- the beaten track from tourism overuse. tural heritage in these areas, the traditional lifestyle of Creating a representation of a particular destination locals, as well as promoting the concepts of sustainable in one’s mind is an intergral part of a successful desti- development and organizing field trips and other activi- nation marketing. The moment a particular represen- ties. There is a visitor information center in Vranjina, the tation of a destination is created, it has to, within the national park Lake Skadar, and this center provides in- boundaries of its own marketing process, find its way to formation on other national parks as well. It also boasts potential visitors. In case of natural parks, as a product a rich collection of animal specimen, a room decorated in the form of a tourism destination, what should be in ethno style, the first room of that kind in that area, stressed are the physical features of a destination, such photos of endemic species, models of all national parks, as the natural environment that surrounds it: geographi- an auditorium etc. Other centers contain collections of cal peculiarities, places suitable for outdoor activities, the species that characterize the given areas. Two more particularities of flora and fauna etc.The positioning can thematic visitor centers were open in the national park also be carried out by listing the ways in which a person Lake Skadar in 2007, namely, the one in Murići, dedi- would benefit from visiting a particular place which, in cated to olive cultivation and production, the handicraft case of national parks, is an escape from the urban daily and contribution of the Frontier, and the other one in routines, a great space for spending the weekend with a Rijeka Crnojevića, dedicated to fishing and lake cruising. family or for vacation, magnificent sites for fishing, raft- The visitor information center of the national park ing, skiing, birdwatching, plant collecting, taking pho- Durmitor is located inside the headquarters of the na- tos of rare animal and plant species. National parks of tional park. A collection of animal specimen of the na- Montenegro represent natural treasure with its geologi- tional park that holds hundreds of taxidermied insects cal, biological and landscape diversity. Each park has its and animals that have the Durmitor belt and the river own individual beauty, which will be presented in this Tara canyon as their habitat, a souvenir shop, different paper as a segment od differentiation, recognisability brochures and tourist leaflets, an auditorium for about and authenticity. 30 visitors, can be found within the walls of the center. The key element of positioning is selecting the mar- The center for visitors of the National park Prokletije is ket segments whose individual needs are still to be sat- located at the crossroads between Alipaša’s wells and isfied (Čerović, 2003). The purpose of this positioning Vusanje. It is an impressive building built and decorated strategy is to make a national park as a destination stand in accordance with its natural surroundings, and a place out compared to the rival destinations that can be the where visitors can obtain all the information needed, first substitute when it comes to changing a destina- both on the park itself and other services provided by tion, which is a direct consequence of the overall mar- the municipality Plav. The parks are also used for biol- ket elasticity. The principles of sustainability have to be ogy, history, geography and other field trips. With the coordinated with a marketing strategy employed by the educational programs, the centers become the meeting management of the national park. points for all those that invest their efforts in promoting and enhancing the importance of the parks. Visitor THE SPECIFICS AND CHARACTERISTICS information centers have other contents which are con- OF NATIONAL PARKS IN MONTENEGRO stantly being updated. The centers have their souvenir shops, which are equipped with a variety of promotional The services offered by the national parks in Monte- materials (brochures, monographs, postcards, maps), negro are diverse and appear in the form of: and handmade items. That’s the original way to repre- ◆◆ Visitor information centers sent part of ethno heritage. ◆◆ Excursions, cruising and windsurfing Excursions represent the most popular tourist offer ◆◆ Birdwatching and glacial lakes in the national park Lake Skadar, since it is the best way 188 Resources as a Basis for Achieving Quality and Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS to get to know the landscape, natural heritage, histori- ones) go through the woods and pass by the lake itself, cal, spiritual and cultural achievements of the people of the old settlements, monasteries and bridges. Following Montenegro. Cruises are organized on a daily basis by the tracks one can reach the top ( the viewpoints) and locals in Virpazar, Vranjina and Plavnica. They include inspect the surroundings in the most peculiar and as- visits to the monasteries, churches, old fishing points and tonishing way. The most attractive viewpoints are those rural areas. Lake Skadar is also perfect for windsurfing in the national park Lovćen from which one can view and sailing. The winds that blow in this area through- the landscapes of the inner parts of Montenegro, the out the year create excellent conditions for those that do Bay of Kotor and the Adriatic Sea. There are many rest- that sport, both for the amateurs and those more expe- ing points along the tracks. Hiking and climbing can be rienced. Extreme conditions for sailing are quite rare on more or less demanding and may last for a couple of the lake. However, they can be very appealing to tourists hours or even a couple of days. The coastal and moun- and recreationists. The water in the lake is quite warm taineering transversal route Orjen-Lovćen-Rumija is 138 and suitable for sailing and enjoying the natural beau- km long and it connects two national parks-Lovćen and ties of the lake. Bird watching is a popular pastime out- Lake Skadar to Rumija in the east and to Orjen mountain door activity. Western Europe and America are the most range in the west, along the coast of the Adriatic Sea. popular sites for bird lovers, but the number of those in The most appealing tourism brand of national parks Montenegro country who decide to take up this interest- is most certainly rafting on the most beautiful river, ing activity is growing on a daily basis. the longest (93 km) and the deepest (1300 m) canyon Lake Skadar is an ideal habitat for birds, with 280 in Europe-the Tara River Canyon. Wooden rafts and different avian types, which is 50% of the total number rubber boats are available for those seeking adven- of species in Europe. The reason for such a great number ture, whether they are amateurs or more experienced of avian types, most of them being endemic and even sportsmen. No matter how irksome the whirlpools and endangered, lies in the biological, geographical and eco- straits are, with the organizational help from national logical peculiarities of the area, as well as in the good parks and other tourist bureaus and the skillful hands state of the ecosystem. The total fauna of the lake consists of the adventurers, they can be easily put under con- of 73 species that are nesting migratory birds, 18-regular trol. Tara’s lakes and torrents in national parks render visitors in autumn and spring, 45-winter guests, 12-regu- excellent conditions for kayaking, which is a real chal- larly spend their summer without nesting and 90 species lenge for those in search of adventure, be they locals, or come to Lake Skadar at times. foreigners. In the summer season, these sportsmen and recreationists organize different competitions and out- A large number of birds on Lake Skadar and the ex- door activities in order to test their kayaking skills, but istence of towers and platforms on Manastirska tapija, also to satiate their thirst for good wine and tasty fish Grmožur, Omerova gorica, Crni žar and Pančevo oko dishes. Cycling, along with swimming, is the sport that create perfect conditions for bird watching. To try bird most engages muscles. Mountain bike cycling is a sport watching here can be a unique experience for all the bird of riding bicycles off-road, in the places such as woods, lovers. The habitats of pelican, cormorant, heron, tern hills, mountains, roads, parks, meadows etc. Moreover, and other bird colonies are interesting to bird lovers. A national parks provide perfect conditions for those who small shallow boat or the towers and platforms can be like being active during their vacation. There are many used for bird watching. cycling tracks that lead through the woods, across paved A quite remarkable section of parks are the glacial roads and by the lake. Moreover, it is not only the cy- lakes located in valleys and coves on the mountains. One cling, but also the natural and cultural monuments that can only get a complete grasp of all the lake’s beauties and are to be seen along the way, which makes this activity charms the moment one sets out to sail in its transparent an enjoyable one. One can also rent a bike. Moreover, a and clear water. Shallow wooden boats can be used for four-day stage race called “The paths of King Nikola” is this purpose. To get to explore a park in this particular organized each year in the national park Tara. There are way is a unique experience. There are 33 glacial lakes in many other festivals such as the following: The days of Montenegro. The most famous are Black Lake on Mount mountain flowers; the days of ecology, tourism and cul- Durmitor, Plav Lake at the foot of Mount Visitor and ture; the festival of wine and bleak etc. The abundance of Biograd Lake on Bjelasica. national parks is reflected in the number of restaurants Hiking and climbing attract a number of tourists. and other businesses operating there, something that Nature lovers can choose between many well-marked only enhances the beauty of the area and the quality of tracks. The tracks (the educational and the recreational one’s time spent in national parks. 189 Resources as a Basis for Achieving Quality and Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

CREATING A BRAND IDENTITY OF NATIONAL PARKS: CONCLUSION THE EXAMPLE OF MONTENEGRO We come to the conclusion that all marketing and Promotional activities, word-of-mouth and similar promotional components of national parks as tourist activities have the cruicial role in the process of draw- products (should) work on the principles of sustainable ing an identity in the mind of a potential costumer. By development. This makes them specific in comparison using the strategy of an identity profiling, tourism des- with other segments of tourism as an economic sector, tination tends to create a position for themselves in the suitable for branding tourism destinations such as Mon- minds of customers of a previously established segment, tenegro. As national parks have based their strategy on this strategy being primarily the result of the nature and sustainability, at the same time they contribute to the structure of their needs, as well as the characteristics of sustainable development through environmental pro- the product itself. tection and biodiversity on ecologically sensitive sites. The image of the place and events associated with it With good marketing and promotional strategies, the exert a strong impact on tourists when choosing which value of the brand destinations in Montenegro can be destination they would like to visit. The image locates the increased. position that a destination holds in the minds of tourists Sustainable development, as well as the development that plan a journey, heightening their expectations prior of tourism in national parks, is very complex and must to the journey, as well as deepening the memories of a always be based on the protection of natural resources journey once it has finished. Strong brands do not only and their proper value and economic exploitation. That fulfill the rational needs, but they also trigger an emo- excludes all forms of mass tourism, which brings more tional response (Solomon et al., 2006, p. 277). A brand problems than actual effects. On the other hand, with generates loyalty, or the absence of it, depending on the the maintenance of cultural and natural heritage of na- emotions it arouses with a client. tional parks of Montenegro, and the improvement of As regards Montenegro, it is still quite difficult to tourist offer, the increasing annual number of visitors discern whether the parks are branded, but we can try and their better recognition in the world are achieved. on the basis of above to represent the potentials of par- Sustainable tourism development in national parks ticular parks and the paths that the process of branding is rather complex and its starting point should always be might take. As already stated, a brand is more than a the protection of all natural resources and beauties, as mere product one should focus on that aspect of a par- well as the ways in which they are to be used more eco- ticular site which is unique when compared to others. nomically. As such, it excludes all forms of mass tourism For example, Lake Skadar can be branded as a pelican that bring along problems rather than any real benefits. breeding site, a bird that has been a trademark of this National parks in Montenegro offer diverse opportu- park for a long time. Another example would be the na- nities for development of particular forms of tourism, tional park Lovćen that does not only commend itself for along with its natural abundance that is well-protected its beauties and plant diversites, but also for its cultural and clear, which is why their role is rather significant. and historical importance. Therefore, the mausoleum Along with the development of sustainable tourism of of Petar II Petrović Njegoš should be taken as a brand national parks attains a higher income and protection, of this park. Biogradska Gora has already established affirmation and popularization of these natural sights. itself as a brand being the oldest rainforest in Europe, but further strengthening of this brand is needed. The national park Durmitor probably has the most diverse REFERENCES network of what to offer to tourists, but what stands out as a crown of its beauty and its importance is Black Bakić, O. (2005). Marketing menadžment turističke des- Lake. One should, in accordance with the management tinacije. Beograd: Čigoja štampa. of these parks and their crucial peculiarities, try and en- Čerović, S. (2003). Menadžment u turizmu. Novi Sad: ter the target group markets, and thus make them want Prirodno-matematički fakultet. to become part of the whole experience. Also, the mar- Popesku, J. (2008). Menadžment turističke destinacije. keting of national parks should be in close connection Beograd: Univerzitet Singidunum. with management from these destinantions for reasons Solomon, M.R., Marshall, G.W., & Stuart, E.W. (2006). of its specificity in terms of ecology, where management Marketing: Real people, real choices. Upper Saddle is based on the principles of sustainable development. River, NJ: Pearson Prentice Hall.

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Vlada Crne Gore. (2002). Master plan: Strategija razvoja turizma Crne Gore 2020. Retrieved September 21, 2016 from http://www.gov.me/files/1054715117. PDF World Tourism Organization. (2015). Yearbook of Tour- ism Statistics, Compendium of Tourism Statistics and data files.Retrieved September 07, 2016 from http://data.worldbank.org/indicator/ST.INT.ARVL

191 Resources as a Basis for Achieving Quality and Destination Competitiveness SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Quality and Competitiveness in Tourism and Hospitality Industry

Key Performance Indicators in the Hotel Industry

Ljiljana Kosar1, Abstract: The initial assumption of successful business of the hotel company is orienta- 2 Slobodan Rašeta , tion towards quality. The quality of a hotel product is a market category that Nikolina Kosar 3 can and should be measured. This requires identification of key performance indicators of hotel companies and ways of their measurement. The aim of this paper is to highlight the importance of performance for the quality manage- 1 The College of Hotel Management, ment system, especially in the light of the new standards ISO 9001 from 2015, Belgrade, Serbia as well as to illustrate the performance measurement methods in the hotel 2QMS Consultant, industry. The heterogeneity of the hotel product imposes a flexible approach Belgrade, Serbia to determining the key performance indicators. Therefore, their specifics will 3The College of Tourism, be shown herein. It also highlights the problem of performance measurement and for this purpose, introduces and explains the notion of comparative Belgrade, Serbia value, which represents the projected standard, established on the basis of the expected quality. Thus, in the context of observation and measurement of the key performance indicators, quality in hotel industry is considered a dynamic and measurable category.

Keywords: indicator, performance, measurement, quality, hotel industry.

Introduction

The hotel product quality approach is based on identification of processes that are crucial for its implementation. Thereby, it is necessary to differentiate between processes themselves and their performance. This distinction allows for the measurement of process performance, thus evaluating the quality of the hotel product. It is necessary to demonstrate the compliance between the planned and actual process performance by measurable indicators, in order to determine the degree of implementation of the expected quality. Thereby, it should also be mentioned that the planned process performance is based on the expectations of consumers – hotel guests. The planned process per- Correspondence: formance, based on a realistic assessment of consumer needs, is the start- Ljiljana Kosar ing point of the hotel product quality. The level of compliance between the consumer expectations, which contain their requirements, needs, desires, e-mail: and experiences attained through immediate consumption, expresses the [email protected] actual level of the achieved quality of the hotel product. 192 Sitcon 2016 Doi: 10.15308/Sitcon-2016-192-198 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

THE SPECIFICS OF THE PROCESS PERFORMANCE Performance is considered to be the end result of an IN THE HOTEL INDUSTRY activity. Assuming that this activity takes place by performing business responsibilities in the most efficient Every organization has its business processes, bu- and effective way, the expected effect is the result of the siness rules and decisions, regardless of whether they performed activity. The process performance, there- are identified or not and whether the members of the fore, can be defined as the effect of the given process, in organization are aware of them or not (Smith, 2003). which measuring takes place (Raseta, 2007). Unlike the The identification of processes is preceded by their de- performance of individual activities, organizational per- finition. Most definitions are based on the literature on formance is particularly important for quality manage- the re-engineering of business processes created in the ment. Organizational performance implies the accumu- 1990s. One common definition of business processes is lated end result of all organizational and work processes as follows: The process is a structured, measurable set and activities (Robins & Coutler, 2005). of activities designed for the production of a specific output for a particular customer or market. In other KEY PERFORMANCE INDICATORS words, the process is a specific sequence of work acti- IN THE HOTEL INDUSTRY vities in time and space, with its beginning and end, i.e. with defined inputs and outputs, that is, the structure of Each organization focused on quality has to measure the operation (Davenport, 1995). The business process the performance of their processes. The initial step in can be more closely defined as a structured, analytical interfunctional set of activities that require constant accomplishing this task is to determine the key perfor- improvements. These activities have a clearly defined mance indicators (KPI). They are measurable indicators beginning and end, during which, in a more or less con- that evaluate the business success of the organization as stant intervals, a value for consumers is created (Bosilj- a whole or some of its parts. Vuksic et al., 2008). Key performance indicators include a set of value In the hotel industry, from the point of process iden- indicators of business activities that are subject to meas- tification, one can access a unique complex process, urement. They can be systematized as follows (MESA consisting of a series of interrelated processes, sub-pro- Metrics Research Study, 2012): cesses, and support processes, whose occurrence is cau- ◆◆ Quantitative indicators that can be presented sed by the presence of guests in the hotel. This unique, numerically, complex process is referred to as a guest cycle that takes ◆◆ Qualitative indicators that cannot be presented place in three main phases: arrival, stay and departu- numerically, re. At each stage, one can identify the basic processes, ◆◆ Leading indicators that can predict the outcome sub-processes, and support processes, which define the of the process, provision of accommodation and food to hotel guests. During the consumption of the hotel product, guests ◆◆ Lagging indicators of realized business success consume its various components and express a lower or failure, or higher degree of satisfaction. On the other hand, du- ◆◆ Input indicators that measure the amount of re- ring the stay of guests in the hotel, particular services are sources involved in the reproduction process, successively repeated. This often leads to inconsistencies ◆◆ Process indicators that represent process effi- in the quality of delivered services, leading to variable ciency, customer satisfaction. ◆◆ Output indicators that reflect the outcomes of These specifics of the guest cycle in the hotel lead to processes and activities, the need for determining the performance of all proce- ◆◆ Practical indicators that are used for comparison sses involved in the implementation of the hotel pro- with other processes in the organization, duct, with the aim of establishing the desired degree of compliance with consumer requirements, that is, the ◆◆ Directional indicators that indicate the progress, appropriate level of quality. stagnation or decline of the organization in some sectors, In the context of highlighting the importance of innovation for entrepreneurship, Peter Drucker discu- ◆◆ Effective indicators that initiate changes, sses innovative performance, pointing out that they are ◆◆ Financial indicators that are used in the measure- achievements by means of innovation (Drucker, 1996). ment of efficiency. 193 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

An organization that measures the performance of ◆◆ Is the project implementation feasible under the its processes should focus on several key indicators that existing socio-economic and technical and tech- will best reflect its business priorities. As business pri- nological circumstances? orities change, key performance indicators should also The fifth criterion (T) insists on setting time frames change. The so-called SMART model can serve for the for the implementation of objectives and tasks. selection of the most appropriate indicators (Meyer, Scheduling allows one to establish the optimal tem- 2003). The model name is an abbreviation of the initial poral dynamics and focus efforts towards intensifying letters of the five key criteria (S-specific, M-measurable, activities and compliance with the deadline. Time-bo- A-attainable, R-relevant, T-time-bound). und objectives should provide answers to the following The first criterion (S) requires setting a clear and questions: an unambiguous objective, not the general one. The ◆◆ When? concretization of the objective is achieved by answering ◆◆ What can I do in the next six months? the five key questions, that is, by using the model 5W: ◆◆ What can I do in the next six weeks? ◆◆ What - What do I want to accomplish?; ◆◆ What can I do today? ◆◆ Why - Why, what are the benefits of this accom- Bearing in mind the heterogeneity of the hotel pro- plishment?; duct quality, it is necessary to access the selection of key ◆◆ Who - Who is involved in the execution of this performance indicators very carefully and selectively. In task?; the hotel industry, quantitative and financial indicators ◆◆ Where - Where will the work take place – the are most commonly used. Quantitative indicators inclu- location identification?; de the number of tourists and overnight stays in a hotel, ◆◆ Which - Which is the work – the identification of the percentage of accommodation capacity utilization, conditions and restrictions? the number of produced and served meals, while the fi- The second criterion (M) insists on the measura- nancial indicators are mostly focused on the relationship bility of the objective. Without measurability, it is not between income and expenses, including the structure possible to monitor the progress in activities to achieve by sectors, that is, types of services (accommodation, the objectives. The measurability of objectives is provi- food and beverages, other). Revenue per available room ded by answering the questions: How much? How do (RevPAR) is an important financial indicator. This is a we know if the objective is being achieved? The third complex indicator that reflects the economic efficiency criterion (A) points out that the objectives have to be of business activities of the entire hotel. An objective realistic and achievable. Setting achievable objectives of hotel management, especially the one with the pro- implies identifying the ways to achieve them, that is, the nounced seasonal business, is to have the average rev- provision of adequate resources (human, material, and enue per available room as high as possible. However, financial). Thus, the fulfillment of the third criterion is the increase in the percentage of utilization of hotel ca- the answer to the question: How can one achieve the pacities does not always lead to a proportional increase objective? The fourth criterion (R) insists on the choice in revenue per available room. Digressive increase, or of truly important objectives, whose achievement has even stagnation, represents the result of lower selling a significant impact on the improvement of the quality prices in the preseason and postseason. This leads to an of a particular product or service, and therefore, on the increase in capacity utilization, but not necessarily to an success of the business activities of the organization. increase in additional spending. In recent years, revenue Important objectives are understood and supported by per occupied room (RevPOR) has been introduced as all levels of management in the organization, and also an indicator of performance, which more clearly indi- the direct executors, which creates a favorable busine- cates the level of hotel guests’ spending (Mogelonsky, ss climate for their implementation. By identifying an 2013). In this sense, business activities can be focused important objective, positive answers to the following on increasing the spending of the existing guests by in- questions are provided: troducing additional contents and permanent quality ◆◆ Is this project viable? improvement. ◆◆ Is this the right time for its implementation? The hotel guest satisfaction is treated as a specific ◆◆ Is it in accordance with the efforts and needs of key indicator of performance. In accordance with the the organization or its sector? above-mentioned classification, it is an output indicator ◆◆ Has the right team been selected for the project of a qualitative nature. The final outcome of the process implementation? of implementation of a hotel product is a hotel guest 194 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS with his/her experience, consistent with the preformed According to this model, the appropriate tools and tech- expectations to a greater or lesser extent. If performance niques should be provided to measure: is understood as a functional capability of a process (Ku- ◆◆ stakeholder satisfaction, koleca, 1985), then the cumulative result of the func- ◆◆ stakeholder contributions, tional capability of the hotel product implementation ◆◆ success of the strategy toward a specific stake- process is consumer satisfaction. Although it is an in- holder group, dicator of a qualitative nature, based on the consumer ◆◆ performance of the processes that are key for the behavior, modern managerial techniques, along with strategy implementation, the help of information technology, that is, specialized software packages, enable permanent monitoring and ◆◆ performance of the resources that are required measuring of hotel guest satisfaction. for taking place of the process of implementation of a particular strategy. The measurement of process performance in the ho- MEASURING CONSUMER SATISFACTION IN THE HOTEL INDUSTRY tel industry is shown by measuring customer satisfaction. The measurement of process performance implies transparency, i.e. regular screening and interpretation The effect of a process can be measured using the of measurement results to all employees. performance index. The performance index is the ra- The hotel guest should be in the spotlight for the tio of the measurement of the output values and the stakeholders. The satisfaction of other stakeholders is planned (expected) values of a process. Considering the reflected through hotel guest’s satisfaction. The roots of above-given, it follows that the performance index is a the guest’s dissatisfaction with particular components of numerical value of effectiveness and efficiency, that is, the hotel product should be sought in the dissatisfaction a measure of effectiveness and efficiency (Raseta, op. of employees, suppliers, other strategic partners, which cit.). Effectiveness is the degree of implementation of the is, in turn, a result of noncompliance with objectives, planned activities and planned results (ISO op. cit.). Ef- strategies, processes, and performance. Therefore, the ficiency is the ratio of the results achieved and resources first step towards implementation of more compre- used (ISO op. cit.). Contemporary models for the pro- hensive models for measuring the process performan- cess performance measurement insist on compliance ce in the hotel industry is a continuous measurement with different priorities, depending on the position in of customer satisfaction. The guest survey, nowadays, the management hierarchy. In order to achieve the key via electronic questionnaires, is the most common way purpose of measurements, it is necessary to establish the of measuring customer satisfaction. The SERVQUAL appropriate performance measurement system (PMS). model, based on the degree of compliance between the The balanced scorecard (BSC) concept, which aims to expected and the perceived quality, is also applied. This provide managers with the most important information model basically includes five groups of components (ac- on the activities they manage, is widely used (Kaplan & cording to: Parasuraman et al., 1988, taken from: Kosar Norton, 1996). The insistence of the BSC model on clar- & Đurišić, 2010): ity and usefulness is reflected in the selective approach to indicators that are subject to measurement, that is, in ◆◆ tangible components of service quality; filtering and clustering as key activities. ◆◆ reliability – the ability to realize the service in the agreed manner and at the agreed time; The performance prism represents a more complex, more comprehensive and more contemporary model ◆◆ responsibility – professionalism, the awareness for performance measurement. The initial assumption of the importance of the service for the customer; of the performance prism is to create values for the key ◆◆ trust – expertise, the ability to gain the service stakeholders. They are considered to be investors (share- user’s trust; holders), customers (consumers), employees, suppliers, ◆◆ empathy (compassion) – understanding, the strategic partners, and the community. The performance ability to put oneself into the position of the user, prism is an integral model for measuring the performan- an individualized approach to the service user. ce of five dimensions (Neely et al., 2002). Stakeholder Service users are interviewed twice, in the pre-con- satisfaction is the upper plane of the prism. The contri- sumption stage, when their expectations are measured, bution of stakeholders to the organization is the lower and in the post-consumption stage, when the quality plane (the bottom) of the prism. They are connected by of perception is measured. The quality of services is three sides – strategies, processes and resources (skills). determined on the basis of the comparison between 195 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

expectations and perceptions, by measuring deviations, via the Internet or a phone application express a higher i.e. noncompliance for each criterion, a group of crite- level of satisfaction with this service than others. Ac- ria, and the hotel itself. On the other hand, the double cording to this research, the most important amenities survey might be an additional burden for customers. for guests include free wireless internet, breakfast (as- For this reason, SERVPERF, a model that measures sortment, quality of service), free parking, and bedding only service performance (service performance - quality. Research has also shown that feedback on social SERVPERF), i.e. the perceived quality, has been cre- networks is mainly given by satisfied guests. The total ated (according to: Cronin & Taylor, 1994, taken from: satisfaction is by 40 index points higher for the guests Kosar & Đurišić, 2010). who have sent posts on social networks. The American Customer Satisfaction Index (ACSI) According to the research of “J.D. Power” company, is among the best known techniques of objective meas- consumer satisfaction for the previous three-year period urement of satisfaction (according to: Gerson, 1994, is presented in the following table. taken from: Kosar & Đurišić, 2010). ACSI model determines the degree of customer satisfaction based on Table 1. J.D. Power North America Hotel Guest Satis- a specific methodology, on the basis of measuring con- faction Index* sumer expectations, the perceived (obtained) quality, and the perceived (obtained) value. Study Year Hotel brand ECSI is the European Customer Satisfaction Index, 2014 2015 2016 which takes into account individuality in the behavior Luxury Segment of European consumers. Depending on the influence 849 857 869 of ethno-sociological, socio-economic and physical- Average geographical factors, many countries have developed Upper Upscale Seg- their own methodologies for calculating the consumer 819 837 838 ment Average satisfaction index.

Continuous monitoring of customer satisfaction in- Upscale Segment 815 833 833 dex is a regular activity of international hotel companies, Average i.e. corporate chains. For instance, specialized companies engaging in consumer satisfaction in the USA and Upper Midscale Seg- - 822 824 Canada carry out annual research and publish the index ment Average of hotel guest satisfaction in selected hotels in North Midscale Segment America. In July 2016, “J.D. Power” company published, 801 787 792 the latest research on this topic (J.D. Power, 2016). The Average survey was conducted between July 2015 and May 2016 Economy/Budget and included more than 63,000 guests from the United 697 728 727 Segment Average States and Canada, who stayed in the selected hotels in North America. The survey, which has been conducted Upper Extended Stay 836 852 844 for 20 years, included eight types of objects – luxury, Segment Average upper upscale, upscale, midscale, economy/budget, upper extended stay and extended stay. Seven key factors Extended Stay Seg- 752 - 775 of the hotel product quality have been selected for the ment Average purpose of evaluation: booking, check-in/check-out activities, hotel rooms, food and beverage, hotel services, Source: J.D. Power North America Hotel Guest Satisfaction In- other hotel amenities, prices and other fees. According dex Study, 2014, 2015, 2016 to this research in 2016, the total index of hotel guest * Empty cells are the result of changes in the methodology of satisfaction was 808 on the scale of 1000, which is by classifying objects in 2014 and 2015. 2 index points higher compared to the results in the previous year. Research has shown a higher degree of All presented class brands have a positive trend of satisfaction of the guests who are members of reward satisfaction, except for the economic/budget segment. It programs by hotel brands. is perceived that the lower the brand category is, the low- The inclination to membership in these programs is er the satisfaction index is. Thus, luxury brands have the lower fot younger guests. The guests who booked a hotel highest, and economic/budget brands have the lowest 196 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS satisfaction index. This phenomenon can be explained of the performance management system. Manageri- by high expectations of consumers that do not decrease ally established, the previous three groups of activities proportionately with the brand category. On the other lead to the quality improvement of the hotel product. hand, lower-class brands should be more involved in An improvement in quality requires further improve- raising the quality of their services. ment of performance standards, customization of the Consumer satisfaction is a complex indicator of measurement system, new analyses of the results and process performance. The higher the satisfaction in- information, and thus, a new cycle of quality improve- dicators are, the higher the process performance is. ment. Therefore, performance management is a dynam- Customer satisfaction integrates all other indicators of ic system that operates cyclically, constantly following performance in the hotel industry. Satisfied customers the changes in the internal and external environment. contribute to increasing loyalty that initiates a higher International hotel chains make changes in their perfor- degree of utilization of accommodation and other facili- mance management systems through re-branding, thus ties, higher average spending, i.e. higher RevPAR. Thus, creating new services. In this way, they reposition them- customer satisfaction management represents the basis selves on the market, become more attractive partners in of the performance measurement process in the hotel the field of franchising and management business, and industry. achieve greater share in the global market.

PROCESS PERFORMANCE MANAGEMENT IN THE HOTEL INDUSTRY

According to ISO 9001 standards, a quality management system is committed to the process identification and management, as well as process performance measurement. A performance management system should be treated as a subsystem of the quality management system. The structure of a performance management system is shown in Figure 1. The effectiveness and efficiency of the performance management system are based on the operation of four groups of activities, as presented in Figure 1. The basis for measurements is identification of performance Figure 1. The structure of a Performance Management System standards. International hotel chains base their business Source: Kosar & Raseta (2013, p. 157) success and globally recognizable image on a complex orientation towards quality. Corporate quality stand- In the hotel management practice, process per- ards are built on the basis of the process approach and formance is ultimately reduced to the effect of human standardization of performance of the previously iden- labor. Permanent exposure to checks can adversely af- tified key processes. In the next phase of performance fect employees in the hotel industry and increase their management system, measurement activities are un- vulnerability to stress. To that end, it is necessary to take dertaken. The techniques and methods of performance the following concrete steps to ensure the effectiveness measurement are constantly improving. International and efficiency of the performance management system: hotel chains make partnerships with the leading world companies engaged in the production of computer pro- ◆◆ develop clear processes and mechanisms for per- grams for process performance measurement, based on formance monitoring, which are understood by the application of statistical and mathematical models. employees; In this area, the domain of monitoring customer satis- ◆◆ file processes and regularly keep records of meet- faction, where advanced mobile technologies are being ings and other forms of communication with included, is the most progressive. The next phase of per- employees; formance management system includes ongoing report- ◆◆ set clear, realistic and achievable expectations for ing activities. The aim of these activities is to achieve employees; full work transparency, which is also realized with the ◆◆ discuss with employees the issues related to the help of software packages and mobile technology. The achievement of the required standards and the process of quality improvement is the main purpose plan to improve performance; 197 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

◆◆ give some time to employees to improve their Drucker, P.F. (1996). Inovacije i preduzetništvo: Praksa i performance, especially when overcoming of bad principi. Beograd: Grmeč. habits is necessary; Harrington, J.H. (1991). Business Process lmprovement. ◆◆ focus on the employee progress, not on the mis- New York: McCraw-Hill. takes they have made; J.D. Power. (2016). North America Hotel Guest Satisfac- ◆◆ provide adequate and timely training and sup- tion Index Study 2016. Retreived September 3, 2016 from http://www.jdpower.com/resource/jd-power- port along the way to improve performance by north-america-hotel-guest-satisfaction-index-study enhancing employee skills; Kaplan, R., & Norton, D. (1996). The Balanced Scorecard- ◆◆ provide feedback to employees on the pace of Translating Strategy into Action. Boston: Harvard their progress. Business School Press. Kosar, Lj., & Rašeta, S. (2005). Izazovi kvaliteta. Belgrade: Conclusion Viša hotelijerska škola. Kosar, Lj. (2009). Uticaj zadovoljstva zaposlenih na kvalitet The contemporary approach to quality management usluga u hotelijerstvu. HOTELLINK 13-14/2009, 931- focuses on the processes, i.e. their performance. Perfor- 936. mance management requires previous identification of Kosar, Lj., & Đurišić, B. (2010). Menadžment kvaliteta u processes, properly selected key performance indicators, hotelijerstvu. Belgrade: Viša hotelijerska škola. appropriate measurement methods, expert analysis of Kosar, Lj., & Rašeta, S. (2013). Performanse procesa kao the results and activities of new improvements. Pro- ključni činilac kvaliteta hotelskog proizvoda. Hotelska cess performance management, which provides con- kuća 2013. Zlatibor, 145-160. tinuous functioning of the quality cycle, is particularly Kukoleča, S. (1986). Organizaciono-poslovni leksikon. Bel- important for services, in this case, the hotel industry. grade: Rad. Consuming a hotel product is achieved through imple- Meyer, P. J. (2003).What would you do if you knew you mentation of the guest cycle. The guest cycle includes a couldn’t fail? Creating S.M.A.R.T. Goals. Retreived series of interrelated and interconnected processes, i.e. September 3, 2016 from https://www.qualistar.org/ services provided to guests from the moment of book- uploads/file/smartgoals.pdf ing, through their arrival and stay, until leaving the fa- Mogelonski, L. (2013). RevPar vs. RevPor. Retreived Sep- cility. The total quality of the hotel product ensures the tember 3, 2016 from: www.hotelsmag.com/Industry/ compliance with the quality cycle (process performance Blogs/Details/44361#sthash.uLFtZ2DB.dpuf. management) and the guest cycle. Neely, A., Adams, C., & Kennerley, M. (2002). The Per- The absence of a compact material form, heterogene- formance Prism: The Scorecard for Measuring and Managing Business Success. London: Prentice Hall. ity, intangibility, consumer inversion, changeability in requirements, needs, and desires of users, and an indi- Pace Today. (2011). Pursuit of Performance Excellence: Business Success through Effective Plant Operations vidualized operation mode, objectively hinder process Metrics. Retreived September 3, 2016 from https:// performance management in the hotel industry. Invest- pacetoday.com.au/pursuit-of-performance-excel- ments in modern organizational structures, employee lence-business-success-through-effective-plant-op- trainings, models for monitoring, measurement and erations-metrics/ analysis of the process performance are the profitable Rašeta, S. (2007). Merljivi ciljevi i merenje performansi investment for the future. u uslugama. Zbornik radova XVII konferencije o kvalitetu, Kvalitet - domaća praksa i svetska iskust- va. Beograd: Jugoinspekt. References Rentzhog, O. (1998). Processartentering: En Grund for Nlorgondagerts 0rganisattoner. Lund: Studentlin- Bosilj-Vukšić, V., Hernaus, T., & Kovačič, A. (2008). eratur. Upravljanje poslovnim procesima: organizacijski i Robins, S.P., & Coutler, M.(2005). Menadžment. Beograd: informacijski pristup. Zagreb: Školska knjiga. Data status. Davenport, T.H. (1995). Reengrneenng a Business Pro- Smith, S. (2003). Strateg: Kako poslovni cilj pretvoriti u us- cess. Boston: Harvard Business School Press. pjeh. Zagreb: M.E.P. Consult.

198 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Quality and Competitiveness in Tourism and Hospitality Industry

SERVICE ORIENTATION AS A BASIS FOR QUALITY SERVICES AND COMPETITIVENESS IN HOTEL INDUSTRY

Milan Ivkov, Abstract: Employee service orientation can impact the company’s reputation for customer Ivana Blešić, service, and affect its success in the hospitality market. Due to the great role Sanja Božić, that service orientation plays in gaining a competitive advantage, this research shall attempt to examine the level of service orientation through the following Lukrecija Đeri three factors: Focus on guests, Organizational support and Work under pressure among employees in the hotels in Novi Sad. The findings indicate that there are University of Novi Sad, statistically significant differences in relation to the employee gender. Addition- Faculty of Sciences, ally, positive correlation was observed among the given factors. Department of Geography, Tourism and Keywords: Hotel Management, service orientation, employee, hotel industry, competitiveness. Novi Sad, Serbia Introduction

The topic of service orientation has attracted considerable attention in recent years and has become the basis for understanding and meeting the needs of consumers. As liaison strategy between the company and its customers, it has become the most important research field in order to reduce the negative effects of interactions between service staff and guests (Liang et al., 2010). Any action that employees take affects customer satisfaction (Kim et al., 2005). A satisfied customer tends to become a loyal customer. A large number of loyal guests lead to company profits and favorable competitive position in the market, which is the ultimate goal of any organization. In order to have service-oriented staff, an organization must provide them with the specific working conditions. On the other hand, only a satisfied employee can be service-oriented. The optimal procedure of serving, support and motivation, reduction of work pressure, and the perception of customer needs have a positive impact on guests. Furthermore, an employee who is satisfied with the treatment at work does not intend to leave the workplace. The employee’s leaving from the company is on the one hand the cost, while on the other hand it affects the performance of all remaining employees, which is undesirable for the organization. Due to the significant role that service orientation plays in gaining Correspondence: a competitive advantage and achieving profits as the ultimate goal, this Milan Ivkov field has been widely explored by scientists and managers in recent years. Teng and Barrows (2009) point out that service orientation is the basis e-mail: for obtaining the desired market position, because it has a huge impact [email protected] on the overall service capabilities. 199 Sitcon 2016 Doi: 10.15308/Sitcon-2016-199-202 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

In modern era, the service sector, especially hospi- pitality industry where employees have to react very qu- tality, requires not only increase of productivity and ickly, and they have to adapt to the changing demands of reduction of operating costs, but also considerable at- their guests. This particularly refers to workers who are tention to positive communication between consum- in direct contact with guests-service staff (Lavric, 2013). ers and employees (Teng & Barrows, 2009). During In other words, this autonomy in decision-making the interaction with guests, an employee may experi- erases the boundaries in the jurisdiction between mana- ence various feelings. Service orientation is the result gers and employees so the employee becomes a leader, of a satisfied employee and involves the expression of and manager becomes a leader of a leader (Erstad, 1997). those emotions that are desired by the customer and the This provides a quick response to consumers’ needs. company. Paying attention to the guests by employees The aim of the research was to estimate the level of is of the utmost importance (Hartline & Ferrell, 1996) employee service orientation in hotels in Novi Sad. because each action employees take affects the customer experience. In order to deliver an excellent experience, METHODOLOGY service orientation must be present at both personal and organizational level (Pizam, 2011). Moreover, certain A model applied by Kim et al. (2003) was used in behavior and attitude of an employee plays the crucial this study. The first part refers to socio-demographic role in the quality of service. Skills and experience can be data while the second part of the questionnaire addre- developed and gained, but the natural hospitality of the sses the dimensions of service orientation, explained staff usually can not be influenced. However, kindness by three factors: Focus on guests (F1), Organizational and accessibility of service employees are often more support (F2) and Work under pressure (F3). The survey important than their expertise. Thus, in the process of was conducted in Novi Sad in 12 hotels among service employee selection, special attention should be paid to staff (waiters, bartenders and sommeliers) in 2015 and the characteristics of their personality. This is especially includes 104 correctly completed questionnaires. important when selecting employees that come in direct contact with guests (Teng & Barrows, 2009). RESULTS AND DISCUSSION Despite the existence of a large number of studies on service orientation, an insignificant number of scientists The largest number of the respondents (79.9%) be- focused on understanding this concept within the hotel longs to the age group up to 30 years, while only 20.2% (Teng & Barrows, 2009) or restaurant industry (Kim et of the respondents are older than 40 years. The majority al., 2003). of the respondents have completed secondary education A guest is willing to overlook certain shortcomings, (60.6%) while 29.8% of them have completed a college if he/she encounters willingness to help and empathy or university. Furthermore, the majority of participants among service employees. In this way, the company (43%) have up to five years of service, while only 10% of gets a loyal guest and expands its business operations. respondents have over 15 years of service. This trend can Finally, the company makes a profit and strengthens be explained by the fact that most of them are under 30 its competitive advantage, which is the ultimate goal of years of age, thus suggesting that they could not have a every hotel industry (Tsai et al., 2010). To ensure em- more significant length of service. ployee satisfaction, the hotel management must guaran- The largest number of service employees (59%) does tee good working conditions. not have a full year of experience in the hospitality esta- The company’s success lies in the organization ef- blishment where they are currently employed, while only ficiency to select, develop and retain high quality work- 9% of them have experience of 5 years or more. Based on force. Since they are part of the extremely competitive that, it can be concluded that employees in the hospita- environment, hospitality organizations begin to develop lity industry change their workplace quite often. Additi- human resources in order to gain a competitive posi- onally, it can be due to the current economic situation in tion, make a profit and offer a high-quality service to the country, which includes unprivileged position of the guests. One of the ways to achieve these goals is through labor, the uncertainty of survival of hospitality compa- proper employee motivation. An important motivating nies in the market, a high unemployment rate, and low factor is the employee authonomy, which is defined as and irregular salaries. a process in which the manager allows an employee to The research results show that the highest ra- independently solve problems with the guests. The em- ting is given to the factor Focus on guests (M=4.3706, ployee authonomy is particularly applicable in the hos- SD=0.32015) and the lowest to the third factor Work 200 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS under pressure (M=4.1256, SD=0.32242). The factor The factor Organizational support positively cor- Organizational support scored M=4.16, SD=0.61522. relates with the factor Focus on guests, which means Reliability of the questionnaire was tested using that the increase of the organisational support, increases Cronbach’s alpha coefficient. The values of coefficients the focus on guests. This is also confirmed by Kim et al. ranged from 0.701 to 0.735, which indicates that the (2003). Work under pressure also positively correlates measuring instrument used in this research is reliable with the factor Focus on guests. The conclusion is that (Nunnaly, 1978). the focus on guests is greater when employees feel less T-test for independent samples was applied with pressure. Additionally, as the organizational support the aim of comparing the arithmetic means of response grows, employees feel less pressure. between male and female respondents (Table 1). Table 2. Correlation results

Table 1. T-test results Focus on Organiza- Work under Factor guests tional suport pressuere Mean Factor t – value Focus on Male Female 1 (n=54) (n=50) guests

Focus on guests 4.3311 4.4102 1.049 Organiza- 0.332* 1 tional suport Organizational support 4.2176 4.1025 -1.252 Work under 0.413* 0.371* 1 Work under pressure 4.2324 4.0189 -2.214* pressuere *p<0.05 *p<0.01

Based on these results, it can be concluded that there CONCLUSION are statistically significant differences in responses regarding the gender of the respondents in the third factor. Female respondents give significantly smaller marks Guest satisfaction mainly depends on the service related to the factor Work under pressure. In other personnel, their skills and knowledge. It is very difficult words, we can conclude that women feel less pressure to draw the line between the service and the process of during service delivery. The same result was found by its delivery. Employees on the first line affect the final Groves (1994) while Kim et al. (2003) concluded that result as they are those who interact with consumers. employee gender does not influence mean ratings in fac- Because of this, managers should primarily focus on tor Work under pressure. The reason why women feel employees and then on the customers. This attitude in- less pressure can be found in the fact that men provide dicates that human resources greatly impact the service assistance to colleagues, seeing them as the “weaker” that will be provided to guests, their satisfaction and the sex. On the other hand, it creates additional pressure desired business results. Employees are the key segment among men, which is most probably why these differ- of the service process and as such, affect the competi- ences occur. tiveness of the company. Additionally, T-test results indicate that both genders feel the same level of organizational support and REFERENCES have the same focus on guests since there is no statistically significant difference between the means related to gender of the respondents. The same results were ob- Cohen, J. (1988). Statistical power analysis for the behavioral sciences. Hillsdale, NJ: Lawrence Erlbaum tained by Kim et al. (2003), reporting that none of the Associates. socio-demographic factors of the respondents, includ- Erstad, M. (1997). Empowerment and organizatio- ing gender, have an impact on service orientation and nal change. International Journal of Contem- its dimensions. porary Hospitality Management, 9(7), 325-333. The relationship between three factors was meas- doi:10.1108/09596119710190976 ured using the Pearson correlation coefficient and it Groves, J.L. (1994). Perceived service orientation of resta- was found that the factors positively correlate (moder- urant employees. Hospitality & Tourism Educator, ate level, p<0.01) (Cohen, 1988). 6(2), 83. doi:10.1080/23298758.1994.10685580. 201 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Hartline, M.D., & Ferrell, O.C. (1996). The Management Liang, R.-D., Tseng, H.-C., & Lee, Y.-C. (2010). Impact of of Customer-Contact Service Employees: An Em- Service Orientation on Frontline Employee Service pirical Investigation. Journal of Marketing, 60(4), Performance and Consumer Response. Internation- 52-70. doi:10.2307/1251901 al Journal of Marketing Studies, 2(2), 67-74. Nunnaly, J. (1978). Psychometric theory. New York: Kim, H.J., McCahon, C., & Miller, J. (2003). Service ori- McGraw-Hill. entation for contact employees in Korean casual- Pizam, A. (2011). Service Orientation in the Hospitality dining restaurants. Hospitality Management, 22(1), Context. International Journal of Hospitality Man- 67-83. doi:10.1016/S0278-4319(02)00073-7 agement, 31(1), 1-2. Kim, W.G., Leong, J.K., & Lee, K.-Y. (2005). Effect of ser- Teng, C.-C., & Barrows, C.W. (2009). Service ori- vice orientation on job satisfaction, organizational entation: antecedents, outcomes, and implica- commitment, and intention of leaving in a casual tions for hospitality research and practice. The Service Industries Journal, 29(10), 1413-1435. dining chain restaurant. Hospitality Management, doi:10.1080/02642060903026247 24(2), 171-193. doi:10.1016/j.ijhm.2004.05.004 Tsai, M.-C., Cheng, C.-C., & Chang, Y.-Y. (2010). Drivers Lavric, L.B. (2013). Fostering empowerment in hospital- of hospitality industry employees’ job satisfaction, ity organisations: a case study of Marriott hotels organizational commitment and job performance. in Switzerland. The International Hospitality and African Journal of Bussines Management, 4(18), Tourism Student Journal, 5(2), 178-188. 4118-4134.

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Quality and Competitiveness in Tourism and Hospitality Industry

Service quality as travel agencies business improvement factor

Dragana Ilić1, Abstract: Travel agencies play a very important role in the tourism market. Contribution 2 Lukrecija Đeri , of travel agencies is a result of the role that they have in tourist traffic and travel Predrag Stamenković1, facilitation. They appear as mediators between tourists that require a range of 3 services and business entities that provide those services. Their main task is, Snežana Milićević therefore, to connect a large number of subjects on the tourism demand side and a number of entities (public and private sector) on the supply side. One of the key factors in achieving and maintaining the competitive advantage 1Higher Business School of Vocational of travel agencies in the market is a high quality of services which provided Studies, tourist satisfaction. Travel agencies can achieve a competitive advantage Leskovac, Serbia by providing complete and continuous quality of service. Only those travel 2 University of Novi Sad, agencies that meet the expectations and demands of tourists in terms of the Faculty of Sciences, quality of services will be able to retain the existing and attract new tourists. Novi Sad, Serbia In modern times, therefore, the quality is a key factor for the survival of travel agencies in the market. The aim of this paper is to emphasize the importance 3 University of Kragujevac, of quality of services for the improvement of the overall business operations Faculty of Hotel Management and of travel agencies. Tourism in Vrnjačka Banja, Vrnjačka Banja, Serbia Keywords: quality, services, travel agencies.

Introduction

Travel agencies play an important role in the tourism market. They largely contribute to tourism becoming the mass phenomenon. Travel agencies have a role of a mediator between tourism demand and tourism supply. Their main task is the travel facilitation and provision of assistance in the organization and implementation of tourist travel. The business success of travel agencies largely depends on the quality of services they offer. The aim of this paper is to highlight the importance of quality and improve the quality of services of travel agencies. This paper shows the results of the survey related to perceptions of service users of travel agencies on the quality of these services, as well as their expectations when it comes Correspondence: to the quality of services of travel agencies in Leskovac.The survey was Dragana Ilić conducted in order to identify and describe the factors that are important for assessing the quality of services of tourism agencies from the aspect e-mail: of users of these services and considerations of the options for improving [email protected] the quality of services of travel agencies in Leskovac. 203 Sitcon 2016 Doi: 10.15308/Sitcon-2016-203-208 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

QUALITY OF SERVICE AS A BASIS FOR REACHING that exceeds users’ expectations (Barjaktarović, 2013, p. COMPETITIVE ADVANTAGE OF TRAVEL AGENCIES 197). In the travel agencies, the human factor has a very important role. Employees in travel agencies represent There are numerous travel agencies in today’s tour- a live element of the work process, they are in direct ism market that have the same or similar offer of travel contact with the actual and potential tourists and busi- arrangements. On the other hand, tourists have diverse ness partners, create travel arrangements and other ser- and complex needs and demands. To achieve these re- vices that are the subject of their business. The success quirements and satisfy the needs of tourists, it’s neces- of travel agencies largely depends on the ability, eligi- sary for travel agencies to offer a wide range of products bility, and kindness of employees who create, sell and / services of high quality, in the place of sale / purchase participate in the execution of tourist arrangements. In of travel arrangements, during the travel and at the des- the process of creation and delivery of tourism products tination. Only those travel agencies that meet the ex- and services, employees represent only one grummet. pectations and demands of tourists in terms of quality The second, also very important grummet, are service of services will be able to retain the existing and attract users, whose assessment of the quality of those services new tourists. The quality of services of travel agencies is very important. Their ideas, suggestions, objections was assessed in different organizations and travel agen- should represent the starting point for managers in de- cies. The quality of services of travel agencies is what cision making in the process of creating and delivering distinguishes a successful travel agency from others. The tourism services. The users of services, therefore, can tourists form their perception of the quality of service of largely contribute to improving the quality of tourist a travel agency before travel, during travel, during their services. The quality of services of travel agencies should stay at the destination and after return from trip. One of be viewed from the aspect of users, because user satisfac- the key factors in achieving and maintaining competition is the only real measure of the quality of services. tive advantage of travel agencies in the market is a high A very important segment of business of travel agen- quality of services provided and customer satisfaction. cies are promotional activities of tourism products and In modern terms, therefore, the quality is a key factor services. In this segment, omissions in ethical standards for survival of travel agencies in the market. Competi- can have very unfavorable effects and a negative impact tive advantage can be achieved by providing a complete on the image of tourist agencies. All kinds of promo- and continuous service quality. What complicates the tional activities must give users the real image about perception of service quality is related to the fact that the tourist product and must not mislead users. Tourist personal attitudes towards quality play an important workers are obliged to provide quality, clear and cred- role. In fact, what one consumer experiences as a superi- ible information to potential users of tourist products or quality, another user might experience as an average and services. Hideaway of the important characteristics quality (Marinković et al., 2013, p. 322). The perception of tourist products and services, untrue information or of the quality of services stems from the comparisons refusal to provide the requested information represent of the customer expectations and the service provided. unethical behavior. Customer satisfaction does not only depend on the quality of service, but also the quality of the delivery process, ASSESSMENT OF THE QUALITY OF SERVICES particularly in relation to quality of performance of the OF TRAVEL AGENCIES IN LESKOVAC FROM personnel who are in direct contact with consumers THE ASPECT OF TOURISTS (Ćosić, 2010, p. 73). There are different degrees of perception, since dissatisfaction with the quality of service The following text shall present the results of a survey to the enthusiastic of delivered service. The low level of on the expectations and perceptions of service users of service quality is in the case when the user is dissatisfied travel agencies in Leskovac about the quality of services with the service provided. If the quality of services is of travel agencies. The survey was conducted in Novem- at the expected level, then a user is on the threshold of ber and December 2015. The results of the research can satisfaction, because he received the expected quality. be useful to managers and employees in travel agencies The obtained quality of service is above expectations, and contribute to the advancement of business through and is achieved by full satisfaction of users. In the first the adjustment of offer of tourism products and services case, it’s about the conflicting quality of service with the to meet the needs of tourists. In order to investigate the requirements and expectations of users. In the second attitudes of tourists about the quality of supply and ser- case, it’s about the harmonized quality of service. In the vices of travel agencies in Leskovac, the survey was con- third case, it’s about the attractive quality of services by ducted on a sample of 200 respondents. Primary data 204 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS collection was conducted on the territory of Leskovac. ◆◆ Professionalism, efficiency and kindness of em- Data were collected by means of a questionnaire spe- ployees in travel agencies; cially drawn up for this survey. The questionnaire, in ◆◆ The attractiveness of travel arrangements; addition to the issues related to gender, age and height Factors which are important for the choice of travel of the total annual revenue, includes the issues related to arrangements, such as: the assessment of the quality of offer of service of travel ◆◆ Previous experience; agencies before (when choosing travel arrangements), ◆◆ Recommendations from friends, relatives, col- during and after travel. The subject of this research is the leagues; assessment of the degree of satisfaction or dissatisfaction of service users with various aspects of the tourist offer ◆◆ Recommendation from the travel agent; and the quality of services of travel agencies in Leskovac. ◆◆ Price of travel arrangements. Thus, the subject of the research determines the task of The engagement of tourist guides during the trip as the research, and that is: well as whether they: ◆◆ Assessment of the factors that influence the se- ◆◆ Respect the plan of schedule of passengers in the lection of a travel agency for the organization and bus; realization of the travel; ◆◆ Respect the travel itinerary; ◆◆ Assessment of the factors that influence the cho- ◆◆ Provide information to passengers during the ice of travel arrangements; trip; ◆◆ Assessment of dedication, efficiency, kindness ◆◆ Perform operational and technical tasks during and expertise of employees in travel agencies in the trip; Leskovac; ◆◆ Provide information to passengers about any ◆◆ Assessment of organization of space of travel changes in the program of the trip. agencies (interior) ◆◆ Assessment of the factors necessary for successful THE ANALYSIS AND INTERPRETATION realization of travel; OF RESEARCH RESULTS ◆◆ Consideration of the relationship between price and quality of services for the travel arrangement; ◆◆ Consideration of the relationship between the The technique used herein for data collection is a expected and obtained quality. questionnaire. In the questionnaire, in addition to the issues related to the demographic characteristics of the The aim of the research is to assess, identify and de- respondents (gender, age, education level, total annual scribe the factors that are important for assessing the revenues), there are 24 questions formulated in the form quality of services of travel agencies from the aspect of of five degrees of Likert scales. users of these services, as well as to consider the possibilities for improving the quality of services of travel agencies in Leskovac, through recognition of ideas, pro- Table 1. Gender of respondents cesses and procedures that will contribute to improving the quality of services. Gender Number Percent (%) Tourists, users of services of travel agencies in Lesk- ovac, had the opportunity to assess: Male 82 41 Factors which affect the choice of a travel agency, such as: ◆◆ Their own positive experience; Female 118 59 ◆◆ Recommendation from friends, relatives, colleagues; Total 200 100.0 ◆◆ The image of a travel agency; ◆◆ The offer of travel agency (attractive travel ar- Source: Authors’ research based on the analysis of data rangements); in SPSS 20. ◆◆ Price of travel arrangements; Factors which relate to the travel agency, such as: If we look at the gender of respondents in a sample ◆◆ Internet pages; of 200 respondents, 82 were men (41%) and 118 women ◆◆ The interior of the travel agency; (59%) (see Table 1). 205 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

The research results show that the services of travel The respondents of different ages differently assess agencies in Leskovac are most used by respondents aged the level of agreement with the factors affecting the from 20 to 29 years (35%), followed by the respondents choice of the travel agency which will organize and real- aged from 30 to 39 years (33%) (see Table 2). The figures ize their trip. The respondents have assessed the level of for the age of participants were as follows: agreement with certain factors across the five degrees of ◆◆ 3% of respondents aged up to 19 years; Likert scales (Strongly disagree; I do not agree; I have ◆◆ 35% of respondents aged from 20 to 29 years; not attitude; I agree; I totally agree). ◆◆ 33% of respondents aged from 30 to 39 years; Respondents of all ages fully agree that the price of ◆◆ 18% of respondents aged from 40 to 49 years; arrangements offered by travel agencies most influence the choice of tourist agencies that will organize and real- ◆◆ 8.5% of respondents aged from 50 to 59 years; ize their trip. ◆◆ 2.5% of respondents aged over 60 years. As for other factors affecting the selection of a travel In relation to the level of education of the respond- agency, the respondents of different age have differently ents, those with higher education (65%) were prevailing. estimated the degree of compliance with these factors, The services of a travel agency in Leskovac are used by as shown below. 17.5% of respondents with secondary education. More- over, 12.5% of respondents with a master’s degree and Respondents up to 19 years of age pointed out that 3.5% of respondents with a doctoral degree have assessed they choose travel agency: the quality of services of travel agencies in Leskovac (see ◆◆ according to their experience when it comes to Table 3). previous travels; ◆◆ based on the recommendation from a friend, Table 2.The age structure relative, colleague. Age Number Percent (%) Respondents aged 20 to 29 years pointed out that they choose travel agency: To 19 6 3 ◆◆ according to the offer of travel agencies (attrac- 20-29 70 35 tive travel arrangements); ◆◆ according to their experience when it comes to 30-39 66 33 previous travels; 40-49 36 18 ◆◆ according to the image of a travel agency; 50-59 17 8.5 ◆◆ based on the recommendation from a friend, relative, colleague. 60 and more 5 2.5 Respondents aged 30 to 39 years pointed out that Total 200 100.0 they choose a travel agency: Source: Authors’ research based on the analysis of data in ◆◆ according to their experience when it comes to SPSS 20 previous travels; ◆◆ according to the offer of travel agencies (attrac- Table 3. The level of education of respondents tive travel arrangements); The level of education Number Percent (%) ◆◆ according to the image of a travel agency; ◆◆ based on the recommendation from a friend, Primary school 3 1.5 relative, colleague. Secondary school 35 17.5 Respondents aged 40 to 49 years pointed out that they choose a travel agency: High education 130 65 ◆◆ according to their experience when it comes to Master 25 12.5 previous travels; ◆◆ according to the image of a travel agency; Doctorate 7 3.5 ◆◆ based on the recommendation from a friend, Total 200 100.0 relative, colleague; Source: Authors’ research based on the analysis of data in ◆◆ according to the offer of travel agencies (attrac- SPSS 20 tive travel arrangements). 206 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Respondents aged 50 to 59 years pointed out that The largest number of respondents with a master’s they choose a travel agency: degree consider the following segments relevant for the ◆◆ according to their experience when it comes to choice of travel arrangements: previous travels; ◆◆ A recommendation from a friend, relative, colleague; ◆◆ according to the image of a travel agency; ◆◆ Previous experience when it comes to choice of a ◆◆ according to the offer of travel agencies (attrac- travel arrangement; tive travel arrangements); ◆◆ A recommendation from a travel agent. ◆◆ based on the recommendation from a friend, The respondents with a doctoral degree consider the relative, colleague. following segments relevant for the choice of travel ar- Respondents aged 60 and over pointed that they rangements: choose a travel agency: ◆◆ A recommendation from a travel agent; ◆◆ based on the recommendation from a friend, ◆◆ Previous experience when it comes to the choice relative, colleague; of a travel arrangement; ◆◆ according to the image of a travel agency; ◆◆ A recommendation from a friend, relative, colleague. ◆◆ according to their experience when it comes to Respondents of all age groups agree with the fact that previous travels; the quality of services of travel arrangements offered by ◆◆ according to the offer of travel agencies (attrac- travel agencies in Leskovac positively correlates with the tive travel arrangements). price of those services, that the expected quality is in ac- The following lines show how the respondents with cordance with the received quality, and that the terms of different levels of education have assessed each of the payment for travel arrangements are acceptable. factors in the selection of a travel arrangement. The respondents have assessed the importance of a certain fac- Conclusion tor across five degrees of Likert scales (completely not important; does not important; neutral; important; very The quality of services of travel agencies is what dis- important). tinguishes successful tourist agencies from others. One All respondents have highlighted the price of a travel of the key factors for achieving and maintaining the arrangement (very important) as an important factor in competitive advantage of travel agencies in the market the choice of a travel arrangement (very important). is a high quality of services provided and high level of As for other factors affecting the selection of a travel customer satisfaction. In modern terms, therefore, the arrangement, the respondents of different level of educa- quality is the key factor for survival of travel agencies tion have differently estimated these factors, as shown in the market. Competitive advantage can be achieved below. by providing the complete and continuous quality of services. The respondents of all age groups fully agree The largest number of respondents with a second- that the price arrangements offered by travel agencies in ary education qualification considers the following seg- Leskovac greatly impact the choice of travel agencies that ments relevant for the choice of travel arrangements: will organize and realize their trip. As for other factors ◆◆ A recommendation from a travel agent; affecting the selection of a travel agency, the respondents ◆◆ Previous experience when it comes to choice of a belonging to different age groups differently estimated travel arrangement; the degree of compliance with these factors. All respond- ◆◆ A recommendation from a friend, relative, col- ents have listed the price of travel arrangements as the league. factor that has the greatest impact on the choice of travel The largest number of respondents with a higher ed- arrangements. As for other factors affecting the choice of ucation qualification considers the following segments a travel arrangement, the respondents of different level relevant for the choice of travel arrangements: of education have differently assessed these factors. The respondents of all age groups agree with the fact that the ◆◆ A recommendation from a travel agent; quality of travel arrangements offered by travel agen- ◆◆ Previous experience when it comes to choice of a cies in Leskovac is in accordance with the price of those tourist arrangement; services, that the expected quality is in accordance with ◆◆ A recommendation from a friend, relative, col- the received quality, and that the terms of payment are league. acceptable for travel arrangements. 207 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

References Spasić, V. (2011). Poslovanje turističkih agencija i organi- zatora putovanja. Beograd: Univerzitet Singidunum Barjaktarović, D. (2013). Upravljanje kvalitetom u hoteli- Stanković, M. (2008). Menadžment kvalitetom turističke jerstvu. Beograd: Fakultet za turistički i hotelijerski agencije. Festival kvaliteta: 35. Nacionalna konfe- menadžment. rencija o kvalitetu, Kragujevac 13-15. maj 2007. Re- trieved September 19, 2016 from http://www.cqm. Ćosić, M. (2010). Upravljanje kvalitetom turističkih uslu- rs/2008/pdf/35/24.pdf ga. Beograd: Visoka turistička škola strukovnih Veselinović, S., & Rajković, D. (2010). ISO 9001:2008 u studija. poslovanju turističke agencije. 6. Naučni skup sa Marinković, V., Senić, V., & Dimitrovski, D. (2013). Me- međunarodnim učešćem, Sinergija 2010. Retrieved renje stavova potrošača o kvalitetu usluga u restora- September 19, 2016 from http://www.singipedia. terstvu. Teme: časopis za društvenu teoriju i praksu, singidunum.ac.rs/content/370-ISO-9001-2008-u- 37(1), 319-338. poslovanju-turisticke-agencije Rajković, D. (2010). Kvalitet i QMS turističke agencije. Živković, R., & Šećković, S. (2008). Istraživanje kvaliteta Retrieved September 19, 2016 from http://www. usluga turističke agencije. Singidunum revija, 5(2), kvalitet.org.rs/ 120-127. Rajković, D., & Milićević, I. (2007). Kvalitet usluga tu- rističke agencije. Festival kvaliteta: 34. Nacionalna konferencija o kvalitetu, Kragujevac 8-11. maj 2007. Retrieved September 19, 2016 from http://www. cqm.rs/2007/pdf/34/52.pdf

208 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Quality and Competitiveness in Tourism and Hospitality Industry

Market Trends for Tour Operators and Travel Agencies Booking Channels - Preferences of Young People in Serbia

Danijel Pavlović, Abstract: ICT technologies have led to significant changes in the tourism and travel Vesna Spasić, market. This has also triggered the emergence of online travel agencies and Nenad Stanić other portals that tourists use for booking tourism and travel related services. The question imposes as to how these changes affected the traditional distribution systems of tour operators and travel agencies. In this paper, special Singidunum University, attention is devoted to such trends in Serbia, and the young population (aged between 15-24 years) was selected as a target group of respondents for the study Belgrade, Serbia conducted herein. The results indicate that traditional distribution systems for tour operators and travel agencies in Serbia still dominate in most of the activities of the young population, and especially for booking tourism and travel services. Based on the research results, the paper presents the statistical data that show the importance of Internet and traditional distribution systems in the process of seeking information and booking for the young population. Keywords: tour operators and travel agencies, young population, traditional distribution, Internet.

Introduction1

The emergence of online tourism market has opened up new dimensions, especially those referring to booking channels. Changes in tourism demand, information technology application in tourism and travel services booking, have caused particular turbulence for travel agencies and tour operators. New online travel agencies have emerged and they use the advantages provided by the online market and the Internet as a tool for the promotion and distribution of tourism and travel services. It is based primarily on the increased number of tourists who use technology for collecting information, trip planning and booking of services related to travel and tourist stay at the destinations. “Understanding how travellers adapt to this change is essential in that technological development not only supports access to and use of information, but also is driven by Correspondence: traveller’s needs and wants” (Xiang et al., 2014, p. 514). Therefore, needs Danijel Pavlović 1 This paper is a continuation of the previously conducted and published research. Spasić, D. Pavlović, N. Stanić, Distributing Tourism and Travel Services in Serbia - Traditional e-mail: Travel Agencies/Tour operators vs. Online Distribution, Synthesis 2015 - International [email protected] Scientific Conference of IT and Business-Related Research, pp. 531 - 536, 2015 209 Sitcon 2016 Doi: 10.15308/Sitcon-2016-209-214 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

and wants of the tourism demand and the increasing Starting from the premise that the use of the Internet use of the Internet are the key factors affecting the tour and modern ICT depends on the market intensity, our operators and travel agencies’ adjustment process to the aim is to present the data on the use of the Internet in market. These processes have led to the process of dis- the total population in Serbia compared to the selected intermediation (Liach et al., 2013), but also to the pro- countries. The sample countries were selected based on cess of re-intermediation in the market (Cheung & Lam, the following criteria: neighbouring countries belong- 2009). Tour operators and travel agencies will adopt this ing to relatively the same region with similar geographic change as much as travellers adopt this change, which characteristics. Based on the data shown in Table 1, it is crucial for development of effective communication can be concluded that regarding the percentage of the strategies (Xiang et al., 2014, p. 514). Internet users, with respect to the total population, Ser- A precondition for the emergence of these trends bia is ahead of Romania, Bulgaria, Albania and Mon- and online market development is information mar- tenegro, while it is lagging behind Romania and Hun- ket intensity, or primarily the number of Internet users gary in terms of the total number of Internet users. In among the general population. According to the avail- accordance with these data, we can conclude that the able the data of the Internet World Stats, 46.4% of the Serbian market is relatively information intensive unlike world’s population uses the Internet. The largest per- those in the neighbouring countries. These data create centage goes to North America, which generates the the basis for further analysis. largest number of Internet users (87.9% of the popula- Online tourism and travel market have become very tion). The second is Europe with 73.5%, immediately intense with an increase in the number of Internet us- followed by Australia/Oceania with 73.2%. With some- ers worldwide. It further contributed to more successful what less frequent number of Internet users stands out linking of tourism supply and demand, thus allowing Latin America/Caribbean (55.9%), Middle East (52.2%), tourists to book services individually or even create their Asia (40.2%) and Africa (28.6%) (The Internet World own packages. Stats, 2015). For the purposes of this research and with the aim to define market information intensity, we Table 1. Internet users in selected countries compared the Internet users in Serbia with the selected Penetration Population Internet Users, Users % neighbouring countries (Slovenia, Hungary, Croatia, Country (% Popula- (2015 Est.) 30-Nov-2015 Europe Macedonia, Bosnia and Herzegovina, Romania, Bul- tion) garia, Montenegro and Albania). Serbia 7 111 973 4 705 141 66.2 % 0.8 % With the intensive development of ICT and online market, more tourists are using the Internet for infor- Slovenia 2 062 874 1 501 039 72.8 % 0.2 % mation, reservation of services using the web tools and booking via third party websites e.g. online travel agencies (Wu et al., 2013; Toh et al., 2011; Ling et al., 2014). Hungary 9 849 000 7 498 044 76.1 % 1.2 % The Internet and ICT have transformed the structure of the tourism value chain and eliminated restrictions Croatia 4 225 316 3 167 838 75.0 % 0.5 % on the agents to perform functions beyond the preset restrictions (Berne et al., 2012, p. 205). Some author also Macedonia 2 069 172 1 408 278 68.1 % 0.2 % state that the virtual value chain offers value-added ser- Bosnia and vices to customers regarding the transformation of value 3 825 334 2 628 846 68.7 % 0.4 % Herzegovina added services through the virtual value chain (Bhatt & Emdad, 2001, pp. 80-81). Romania 19 861 408 11 178 477 56.3 % 1.9 % The aim of this paper is to examine the tourism demand trends, specifically among the student population, Bulgaria 7 202 198 4 083 950 56.7 % 0.7 % regarding the use of the Internet and attitudes towards the choice of booking tourism services in Serbia. The Montenegro 622 099 379 480 61.0 % 0.1 % basic question, as the starting point in the analysis, is the method of booking selection: Internet use vs. tradi- Albania 2 893 005 1 815 146 62.7 % 0.3 % tional distribution in booking tour operators and travel agencies services. Source: Internet World Stats, 2015 210 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

The online channel plays a crucial role in the tour- The most important source of information for Eu- ism and hospitality industry (Ling et al., 2014, p. 234). ropean tourists is word-of -mouth, i.e., recommenda- One of the channels that appeared on the online market tions by friends and relatives (55%), but they also very are online travel agencies (OTA’s), which also cooper- often use the Internet websites (46%). Only 18% of all ate with tour operators and other third party tourism respondents said that travel agencies or tourism offices industry enterprises (hotel, rent-a-car companies etc.) represent an important source for the decision-mak- offering their products using the Internet as a tool for ing process. Social-media sites are marked by 8% of promotion and distribution. respondents. There is a distinction in the results concerning the sources of information used by the young Another question that arises is related to the compro- population (aged between 15-24 years): Internet web- mising positions of traditional tour operators and travel sites with 51%, social media sites with 13%, travel agen- agencies as well as to how such trends can really affect cies and tourism offices with 14%. The results of Serbia’s compromising operations of these entities. In addition, neighbouring countries are illustrated in Table 2. it is important to pay attention to the factors on the tourism demand side, which define those elements that con- According to the research results, it is important tribute to the significance of traditional tour operators to emphasise that Internet web sites are an important and travel agencies. For the purpose of finding answers source of information for 18% of the respondents in the to these questions, the survey was conducted among the Former Yugoslav Republic of Macedonia and for 20% student population. Accordingly, the results shall be pre- of respondents in Romania. On the other hand, travel agencies and tourism offices are an important source sented in the remaining part of the paper. of information only for 7% and 8% of respondents in Bulgaria and Hungary, respectively. Survey on Europeans Preferences towards The second important question refers to the methods Tourism – Serbia’s neighbouring countries that tourists use for holiday organisation. The Internet, as a growing trend, is most commonly used around Eu- A survey on the preferences of Europeans towards rope for searching information and organizing holidays. tourism is conducted in January 2015 (Flash Barometer According to the results of the survey in 2014, 66% of 414, 2015). Certain results of these studies indicate some European tourists use the Internet for organizing their questions related to the herein conducted research. Ac- holidays with an increasing trend of 8% compared to the cordingly, an important trend among European tourists previous year. At the same time, only 19% of respond- is shown. ents refer to travel agencies for organizing their holi- The results of this survey, which are relevant for this days (-3% compared to the previous year). For young paper, are related to two important questions: Most- population (aged between 15-24 years), the Internet is a used sources of information by European tourists for lot more common tool for holiday organization (69%). planning a holiday in 2014, and Methods used to organ- On the other hand, 19% of young population uses travel ize a holiday in 2014. The results indicate the following agencies for such purposes. (Flash Barometer 414, 2015):

Table 2. Source of information - the results for neighbouring countries (in %) Travel Country Recommend. Internet Personal agencies and Catalogue Social media Paid guide News-paper of friends websites experience offices brochures sites books TW Bulgaria 56 40 25 7 4 6 2 8 Croatia 62 32 33 12 8 6 3 8 Romania 47 20 26 15 6 8 4 8 Slovenia 45 26 33 14 11 12 3 6 Hungary 60 43 32 8 11 6 4 7 Macedonia 36 18 52 20 2 10 0 6 Montenegro 54 33 35 15 4 8 2 7 Source: Flash Eurobarometer 414, 2015 211 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

There were also certain changes in European tour- research instrument (Zikmund et al., 2010, p. 232). The ists’ behaviour referring to the type of holiday, especially respondents were surveyed in late December 2014 and in the cases of package tours or separate products. The mid-February 2015 and in December 2015. general trend is that booking tourism and travel services Out of the total of 86 respondents, 62.8% were fe- separately, avoiding the travel agencies and tour opera- male and 37.2% male. The respondent’s years are classi- tors, is being more popular among Europeans unlike the fied into categories and the analysis indicates the follow- package holidays booking. According to the results in ing structure: 69.8% of respondents belong to the group 2014, 41% of respondents went on at least one holiday aged between 21-25 years, 24.4% belongs to the group where they bought services separately, 36% went on a aged between18-21 years, while only 5.8% respondents traditional package holiday, while 30% opted for all- belong to age group exceeding 25 years. When we talk inclusive holidays. When we talk about these trends in about how often per year the respondents go on a jour- Serbia’s neighbouring countries, it can be observed that ney that lasts more than 2 (two) days, 43% of respond- the Internet is also the most common tool, as shown in ents said they travelled 1 to 2 times per year, 29.1% of Table 3. respondents were travelling 3-4 times, 17%, was travel- It is important to emphasise that in the case of Mace- ling 5-6 times, while % of respondents travelled more donia, the level of Internet use is the lowest among all of than 6 times. Three respondents (3.5%) did not travel the neighbouring countries. Serbia didn’t participate in even once a year. The results have shown that, among the survey in 2014. As regards the most important and the respondents, 53.5% generally prefer organised travel frequently used information sources, 54% of respond- (using the package holidays), while others are mostly ents highlighted friends and relatives, 26% opted for In- travelling individually. ternet web sites, while 14% of respondents mentioned travel agencies and tourism offices. The Internet was As the main reason influencing the choice of a spe- the main method of holiday arrangement for 25% of re- cific travel agency for organising a holiday, the respond- spondents, while 29% stated that they organise holidays ents indicated that they choose the agencies whose ser- with the assistance of travel agencies. When it comes vices they have already used (54.7% of respondents), to types of holidays, services purchased separately are 24.4% decide to change the travel agencies, 4.7% tend represented in 32%, package travel – 48%, all-inclusive to choose the nearest location and 14% avoided using holidays – 27%. the services of travel agencies and tour operators. The second part of the survey is related to the Inter- Survey on preferences among young net use in booking services and information collection. population in Serbia The results indicate that the information about travel and services is regularly collected over the Internet by The study is based on the following questions: What 41.9% of respondents, while 25.6% of respondents do are the preferences of young people towards booking it often, 18.6% sometimes, 12.8% use only the Internet, holidays in Serbia? Which trends are significant in Ser- while 1.2% of respondents do not use it at all. The results bia? What is the relationship between the traditional indicate that, in a large percentage, the respondents use distribution and Internet use in booking tourism and the Internet for collecting information about services travel services in Serbia? A questionnaire was used as a related to tourism and travel. Table 3. Methods used for holiday organisation in neighbouring countries (in %) Through Travel Over the Transport Internet someone you On-site By post Country agencies phone company know Bulgaria 51 18 16 12 8 4 2 Croatia 36 25 18 13 6 11 1 Romania 38 21 18 10 14 3 0 Slovenia 54 17 21 8 7 1 2 Hungary 48 27 23 11 7 1 2 Macedonia 27 21 27 15 32 10 1 Montenegro 29 17 20 14 21 10 1 Source: Flash Eurobarometer 414, 2015 212 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

When it comes to buying airline tickets over the above answers imply that they do use the Internet in Internet, the data slightly differ. Namely, 47.7% of re- such a percentage for booking. The difference among respondents do not use the Internet to purchase tickets, spondents can also be observed for the question related 31.4% do it sometimes, 14% often and 7% regularly and to whether they use the Internet or travel agencies for exclusively. Although there is a presumption of high booking tourism and travel services abroad and in the market information intensity, it is clear that the pur- country. The results indicate that for booking services chase of air tickets over the Internet is not represented abroad, 81.4% of respondents are using travel agencies/ to a large extent when we compare it with the use of tour operators, while the Internet is used by 18.6%. As the Internet to collect information. As regards accom- regards booking in Serbia, the situation is a bit differ- modation booking via the Internet, the data indicate a ent: 51.2% use travel agencies/tour operators and 48.8% strong similarity to the previous question. Specifically, use the Internet. Here we can express the conclusion 47.7% of respondents do not book accommodation via that there is greater confidence in booking service over the Internet, 37.2% do it sometimes, 10.5% often, while the Internet when respondents are travelling within the a total of 4.7% of respondents do it regularly and ex- country, while when travelling abroad when they more clusively. When it comes to booking package tours via often turn to travel agencies/tour operators. the Internet, the situation is quite “dramatic”: 61.6% of Regarding the type of interaction that respondents respondents do not buy packages in this way, 30.2% do favoured with travel agencies/tour operators, interac- it so sometimes, 4.7% often, while 3.7% of respondents tion face to face with the agent is preferred by 95.3% of do it regularly and exclusively. Based on the analysis of respondents, 2.3% preferred phone, while e-mail cor- these issues, it is possible to assume that the respondents respondence and internet-chat are preferred by 1.2% of have more confidence in booking services and packages respondents. We can assume that the information and directly by going to the travel agency or directly with the advisory role of travel agencies retained an important service providers. On the other hand, there is the ques- factor as a benefit for the existence of travel agencies tion of advantages and disadvantages of booking servic- in the market. Therefore, the respondents were asked es via the Internet as a tool. Also, the question imposes how often they are consulting with other tourists on the as to whether travel agencies and tour operators allow Internet about tourism and travel services. The results bookings through their websites. The survey, which show that 40.7% of respondents do not consult and seek was conducted in 2014 among receptive travel agencies advice from other tourists over the Internet, 39.5% does (DMC’s) in Serbia (Spasić et al., 2013, p. 774) points out it sometimes 15.1% does it frequently, and 4.7% does it that 50% of respondents use mainly traditional “tools” regularly. Such findings raise a question of vulnerability to promote their products / services (fairs, advertising of the traditional business of tour operators/travel agen- etc.) while the other half uses electronic media (websites, cies under the influence of the Internet. Consequently, portals, banners etc.) for promotion. On the other hand, the respondents were asked (in the form of the optional 63% of the surveyed DMCs use information technolo- questions) whether the classical travel agency - retailers gies and sales operations (accepting queries, requests for and the traditional tour operators will “survive” in the service reservation etc.) while 37% are selling products market in accordance with the changes brought by the / services in the traditional way. The analysis concluded Internet. A large percentage of respondents are those that the payment over the Internet is not a common who were not able to give an answer (23.3% of them for option, and it cannot be found on the websites of these travel agencies and tour operators for 33.7%). On the agencies. These results, along with certain research limi- other hand, 64% of respondents are of the opinion that tations, surely indicate the common practice in the use travel agencies will survive in the market (12.8% is not of Internet in business operations among receptive trav- considered); while for the tour operators that percentage el agencies in Serbia. The results can also be an indicator is 69.3% (7% is not considered). of demand behaviour, which probably refers to the lack of trust in online payment systems. Conclusion In this paper, we also tried to find the respondents’ opinion on whether the booking of tourist services/ packages over the Internet is cheaper or more expen- This research points to several questions of which sive. The results showed that 77.9% considered it a tool the most important are: Has the Internet, as a booking through which the booking of services/package tours tool in Serbia, developed in line with the present trends, is cheaper, while 22.1% considered it more expensive. and how much does it affect travel agencies and tour Notwithstanding this position, the results imply that operators? On the other hand, the question imposes as 213 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

to whether the traditional booking channels in Serbia References are still predominant. The paper points out to certain conclusions that indicate the following features of tour Berne, C., Garcia-Gonzalez, M., & Mugica, J. (2012). How operators and travel agencies market in Serbia. Young ICT shifts the power balance of tourism distribution population in Serbia (age 15-24) places their trust in channels. Tourism Management, 33(1), 205-214. doi:10.1016/j.tourman.2011.02.004 traditional agencies and tour operators more than they Bhatt, G.D., & Emdad, A.F. (2001). An analysis of the vir- do in booking over the Internet. For travel agencies and tual value chain in electronic commerce. Logistics tour operators in Serbia, an important fact is that among Information Management, 14(1/2), 78-85. the young population, 53.5% of respondents generally doi:10.1108/09576050110362465 travel in an organized way, using their services, and the Cheung, R., & Lam, P. (2009). How Travel Agency Survive main reason for that is the confidence gained during in eBusiness World? Lam Communications of the IBI- their previous travelling (54.7% of respondents). Book- MA, 10(11), 85-92. doi:10.1177/1096348012442544 ing accommodation, as also buying airline tickets via European Commission. (2015). Preferences of Europeans to- the Internet, is not that frequent as it would be expected. wards tourism. Retrieved March 16, 2016 from Booking package tours via the Internet is not that fre- http://ec.europa.eu/public_opinion/flash/fl_414_sum_ en.pdf quent, and we can conclude that traditional travel agen- Internet World Stats (2015). Internet Usage Statistics - The cies and tour operators have an advantage in the Serbian Internet Big Picture - World Internet Users and 2015 market, unlike booking online, if we take into consid- Population Stats. Retrieved March 16, 2016 from eration the assumption that there is more confidence http://www.internetworldstats.com/stats.htm in booking services and packages by going directly to Ling, L., Guo, X., & Yang, C. (2014). Opening the online the travel agency or tour operator. Although the re- marketplace: An examination of hotel pricing and spondents think that booking services / package tours is travel agency on-line distribution of rooms. Tour- cheaper via the Internet, it does not affect their decision ism Management, 45, 234-243. doi:10.1016/j.tourman.2014.05.003 to, in a large percentage, choose traditional booking in travel agency/tour operator. A quite interesting conclu- Llach, J., Marimon, F., del Mar Alonso-Almeida, M., & Bernardo, M. (2013). Determinants of online book- sion is that the vast majority of young population does ing loyalties for the purchasing of airline tickets. not use the Internet for booking services abroad, but on Tourism Management, 35, 23-31. doi:10.1016/j.tour- the contrary, they go to the travel agency / tour opera- man.2012.05.006 tor. On the other hand, when travelling in Serbia, the Spasić, V., Njeguš, A., & Pavlović, D. (2014). Modern in- Internet is more used, but still less than the traditional formation technologies application in destination channels. This is further supported by the fact that the management companies. Impact of Internet on Busi- interaction face to face with the agent is preferred by ness Activities in Serbia and Worldwide / Singidunu- mUniversity International Scientific Conference Sin- 95.3% of respondents. Accordingly, this paper involved teza 2014. doi:10.15308/sinteza-2014-772-776 the issue of information market intensity, and the con- Toh, R.S., DeKay, C.F., & Raven, P. (2011). Travel plan- clusion that could eventually be derived from the results ning searching for and booking hotels on the inter- and the analysis may be that information intensity is net. Cornell Hospitality Quarterly, 52(4), 388-398. only one of the grou of factors that influence the level doi:10.1177/1938965511418779 of participation of electronic commerce in distributing Wu, E.H., Law, R., & Jiang, B. (2013). Predicting brows- packages and tourism and travel services. On the other ers and purchasers of hotel websites a weight-of-evi- hand, this study does not include other age populations dence grouping approach. Cornell Hospitality Quar- and views of tour operators and travel agencies about terly, 54(1), 38-48. doi:10.1177/1938965512468225 traditional and online distribution relation in Serbia, so Xiang, Z., Wang, D., O’Leary, J.T., & Fesenmaier, D.R. (2014). Adapting to the Internet: Trends in Travel- we cannot apply these conclusions to the entire Serbian ers’ Use of the Web for Trip Planning. Journal of market. Travel Research, 54(4), 511-527 doi:10.1177/0047287514522883.

214 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Quality and Competitiveness in Tourism and Hospitality Industry

Macedonian tourism insight through the analysis of stocks returns of quoted tourism companies at MSE

Zoran Ivanovski, Abstract: In this paper we present the results of the statistical analysis, focused on de-

Valentina Angelkoska , termining the character of relationship between stocks of two quoted tourism Zoran Narasanov companies at Macedonian Stock Exchange (MSE) using the data for the last 52-weeks series of daily stocks’ closing prices as well for the Macedonian Stock Exchange Index (MBI-10). The linear regression and correlation analysis of two securities provide evidence for statistical significance of their stocks’ daily University of Tourism and Management returns at MSE. On the contrary, regression analysis did not reveal a statisti- in Skopje, cally significant relationship between MTUR, MPOL and MBI-10. Through the Skopje, Republic of Macedonia analysis of daily stocks’ returns at MSE we could not determine a statistically significant relationship between tourism growth in the Republic of Macedonia and tourism companies’ securities prices in the last two years. Some implications for tourism planning and portfolio management can be drawn.

Keywords: tourism, stock, return, correlation, regression.

Introduction

Macedonian Stock Exchange (MSE) was established in September 1995, but its real start was with the first ring of Stock-Exchange bells on March 28, 1996. MSE started on November 01, 2001 to calculate Mac- edonian Stock Exchange Index (MBI), which consists of five most liquid stocks at MSE. MBI was price not weighted index, and as a first index, it finished its function as an aggregate indicator for stock exchange movement quantification. On January 04, 2005, a new MSE index was introduced (MBI-10), as weighted average indicator. It enables using market capitalization more realistically, following the price movements at MSE. MBI-10 calculation is in accordance with teh methodology for MBI-10 calculation and it consists of ten quoted stocks on MSE official market segment. Stock Index Committee regularly (two times per year) and ad- hoc (in special circumstances) makes updates of MBI-10 structure in accordance with market conditions. There are three quoted companies at MSE: Makedonija turist AD Correspondence: Skopje (MTUR), Metropol hoteli AD Ohrid (MPOL) and International Zoran Ivanovski hotels AD Skopje (INHO). The authors shall analyses returns data of e-mail: MTUR and MPOL for a period of two years:: firstly, to determine mu- [email protected] tual correlation coefficients and statistical significance of stock prices of 215 Sitcon 2016 Doi: 10.15308/Sitcon-2016-215-222 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

these two tourism companies; secondly, to determine not correspond to reality, and grossly underestimate the their linear and multiplied regression with MBI-10 daily risk of huge market swings (Ivanovski et al., 2015). closing prices. INHO security is not liquid at MSE since Fama (1965) reported that daily returns of stocks on January 2013, and there is no trading data, so it will not the Dow Jones Industrial Average (DJIA) display more be analyzed in this paper. kurtosis than permitted under the normality hypoth- Through the analysis of stock prices of two tourism esis. Since that early work of Fama, it has typically been companies we are also trying to determine if the offi- found that daily returns display more kurtosis than that cial state statistics data for the growth of Macedonian permitted under the assumptions of normality, while tourism can be confirmed with the stock prices rise of skewness has also been prevalent (Mills, 1995). quoted tourism companies at MSE. We try to identify The expected returns and variances are almost al- the reliable results of regression analysis that can be ways estimated using past returns rather than future used for tourism planning and portfolio management. returns. The assumption that all risk-returns models However, the basic task of our research is examination use when they use historical variances is that past re- of basic parameters and character of tourism companies turn distributions are good indicators of future return stocks’ returns at MSE. distributions. When this assumption is violated, as is the The remainder of this paper is structured into three case when the asset’s characteristics have changed sig- sections. In Section 1, we present literature overview, nificantly over time, the historical estimates may not be while in Section 2 we present the financial information good measures of risk (Ivanovski et al., 2015). about the observed companies at MSE. Section 3 pre- The bias towards positive or negative returns is rep- sents the empirical results of the regression analysis of resented by the skewness of the distribution. If distribu- stocks at MSE. Section 4 summarizes the main conclu- tion is positively skewed, there is higher probability of sions. large positive returns than negative returns. The shape of the tails of the distribution is measured by the kurto- LITERATURE OVERVIEW sis of the distribution; fatter tails lead to higher kurtosis. In investment terms, this represent the tendency of the price of this investment to jump (up or down from cur- Markowitz Portfolio Theory (MPT) models an as- rent levels) in either direction (Damodaran, 2006). set’s return as a normally distributed function. This theory calculates risk as the standard deviation of return, In case where distribution of returns is normal, in- as well as the return of portfolio as the weighted com- vestors do not have to worry about skewness and kurto- bination of the assets’ returns. By combining different sis. Normal distributions are symmetric (no skewness) assets whose returns are not positively correlated, MPT and defined to have a kurtosis of zero. suggest the possibility to reduce the total variance of the When return distributions take this form, the char- portfolio return. This theory also has the basic assump- acteristics of any investment can be measured with two tion that investors are rational and markets are efficient variables - the expected return, which represents the op- (Markowitz, 1952). portunity in the investment, and the standard deviation Although MPT was developed in the 1950s, it gained or variance, which represents the danger (Ivanovski et popularity in the 1970s and was considered the basis in al, 2015). the mathematical financial modeling. However, since ANALYSIS OF FINANCIAL STATEMENTS then, many theoretical and practical criticisms have OF MTUR, MPOL AND INHO been raised on this matter. The theory and practice provide a lot of evidence that financial returns do not follow Makedonija turist AD Skopje is a company that a Gaussian distribution or any symmetric distribution. works in the hotel, tourism & catering industry. The There is also skepticism that the correlations between company manages seven hotels: Holiday Inn, Best asset classes are not fixed, but can vary depending on the Western Hotel Turist, Hotel Karpos, Hotel Jadran, Ho- external events (especially during crises). tel Bristol, Best Western Hotel Bellevue, Hotel Vodno, Long ago in empirical studies, it was noticed that all located in Skopje. The company also runs two restau- returns of stocks (indexes, funds) are badly fitted by rants in Skopje: Pivnica and Ogniste - Makedonija and Gaussian distribution because of the heavy tails and the London Pub. strong asymmetry (Mandelbrot, 1960; Mandelbrot, We present the vertical and horizontal analysis as 1963). Mandelbrot and Hudson (2006) elaborate that well as the main financial ratios of MTUR (See Table 1 the random walk and Gaussian daily returns simply do and Table 2). 216 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Internesenel Hotels AD Skopje is a company engaged Hotels-Metropol AD Ohrid is a tourism company. The in the tourism industry. It operates the Hotel Continental company manages three hotels located at Lake Ohrid: Ho- in Skopje. We present the vertical and horizontal analysis tel Metropol, Hotel Tourist and Hotel Bellevue. The hotels as well as the main financial ratios of MTUR See( Table are equipped with conference facilities, one casino, res- 3 and Table 4). taurants and bars, sports and recreation center, including

Table 1. MTUR Analysis of financial statements Year 2015 2014 2013 2015% 2014% 2013% 2015 2014 2013 Total Revenue 367650 369521 396938 100% 100% 100% 99,49367 93,09288 100 Operating profit 117243 124389 145424 32% 34% 37% 94,25512 85,5354 100 Net profit 135758 151083 193422 37% 41% 49% 89,85657 78,11056 100 Equity 2359512 2312011 2256966 642% 626% 569% 102,0545 102,4389 100 Total liabilities 39506 55393 528342 11% 15% 133% 71,31948 10,48431 100 Total assets 2399018 2367404 2308524 653% 641% 582% 101,3354 102,5505 100 Market capitalization 1741151 1763763 1515027 474% 477% 382% 98,71797 116,4179 100

Table 2. MTUR Financial ratios Year 2015 2014 2013 Return on sales 31.89% 33.66% 36.64% Net earnings per share (EPS) 300.19 334.07 427.69 Return on assets 5.66% 6.38% 8.38% Return on equity 5.75% 6.53% 8.57% Price to earnings (P/E) 12.83 11.67 7.83 Book value per share 5,217.31 5,112.28 4,989.96 Price to book 0.74 0.76 0.67 Dividend per share 206.87 185.85 207.00 Dividend yield 5.37% 4.77% 6.18%

Table 3. INHO Analysis of financial statements Year 2015 2014 2013 2015% 2014% 2013% 2015 2014 2013 Total Revenue 90051 93325 93890 100% 100% 100% 95,91 99,39 100 Operating profit 5584 3691 10011 6% 4% 11% 55,77 36,86 100 Net profit 2863 1319 6028 3% 1% 6% 47,49 21,88 100 Equity 243912 241049 237932 271% 258% 253% 102,51 101,31 100 Total liabilities 48292 52821 66748 54% 57% 71% 72,34 79,13 100 Total assets 292204 293870 304680 324% 315% 325% 95,90 96,45 100 Market capitalization 2124869 2124869 2124869 2360% 2277% 2263% 100 100 100

Table 4. INHO Financial ratios Year 2015 2014 2013 Return on sales 6.20% 3.95% 10.66% Net earnings per share (EPS) 5.40 2.49 11.36 Return on assets 0.98% 0.45% 1.98% Return on equity 1.17% 0.55% 2.53% Price to earnings (P/E) 742.18 1,610.97 352.50 Book value per share 459.73 454.33 448.46 Price to book 8.71 8.82 8.93 Dividend per share Dividend yield 0.00% 0.00% 0.00%

217 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

basketball, tennis, volleyball and soccer courts, swimming that the results provided will be useful for stock valua- pools, as well as the spa center. The main shareholder of tion. The basic task of our research is determination of the hotel is Metropol AD Ohridis Fersped AD Skopje. We returns character at MSE and identification of mutual present the vertical and horizontal analysis as well as the dependence and correlation of stocks returns. We ar- main financial ratios of MTUR in Table 5 and Table 6. gue that our findings have practical application for stock The financial analysis gives information about the value forecast and tourism planning. financial results of those three companies. It is obvi- We use the sample of two quoted tourism com- ous that only MPOL revenues raise in 2015 and 2014 panies’stocks from the official market segment of MSE: compared to 2013, while other ratios do not indicate MTUR and MPOL. The basic criterion for the analysis increased profitability. We present the current three se- was to analyze stocks of tourism companies. MSE was curities’ price multiplies in Table 7. the main source of data through the official stock news- DESCRIPTIVE STATISTICS letters and annual reports. The two-year period allowed us to make the appropriate conclusion. The analysis We analyze two years (2014-2015) stocks daily re- was performed using the daily closing prices of traded turns data at MSE in order to determine stock correla- stocks as well for MBI-10 for the period from January tion and comprehensive regression analysis. We believe 01, 2014 to December 31, 2015.

Table 5. MPOL Analysis of financial statements Year 2015 2014 2013 2015% 2014% 2013% 2015 2014 2013 Total Revenue 157192 154336 149977 100% 100% 100% 104,81 102,91 100 Operating profit 32250 34990 32651 21% 23% 22% 98,77 107,16 100 Net profit 26456 31907 32440 17% 21% 22% 81,55 98,36 100 Equity 435726 410450 400278 277% 266% 267% 108,86 102,54 100 Total liabilities 174112 56676 35844 111% 37% 24% 485,75 158,12 100 Total assets 609838 467126 436122 388% 303% 291% 139,83 107,11 100 Market capitalization 186300 290835 114885 119% 188% 77% 162,16 253,15 100

Table 6. MPOL Financial ratios Year 2015 2014 2013 Return on sales 20.52% 22.67% 21.77% Net earnings per share (EPS) 25.56 30.83 31.34 Return on assets 4.34% 6.83% 7.44% Return on equity 6.07% 7.77% 8.10% Price to earnings (P/E) 7.04 9.12 3.54 Book value per share 420.99 396.57 386.74 Price to book 0.43 0.71 0.29 Dividend per share 21.00 Dividend yield 0.00% 0.00% 18.92%

Table 7. Curretnt price ratios Current Ratios BV Per Dividend Symbol Total shares Avg. price EPS P/E P/B Value Share Yield Exchange Listing - Ordinary shares INHO (2015) * 530,554 4,005.00 5.40 742.18 459.73 8.71 0.00% MPOL (2015) * 1,035,000 137.00 25.56 5.36 420.99 0.33 0.00% MTUR (2015) 452,247 3,492.00 300.19 11.63 5,217.31 0.67 5.92%

218 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

By means of the regression analysis, we have deter- independent value (stock price) is useful in predicting mined a strong positive correlation between two stock other company’s stock price. The t-statistic indicates the prices at MSE (value oscillate around 0.83), and a weak number of standard deviations from zero the coefficient. correlation between stocks and MBI-10, as shown in Obviously, the higher this number, the more confidence the following table: we have that the coefficient is different from zero. Gen- erally for large samples, a t-statistics greater than 2.00 is Table 8. Correlaton coefficients at MSE significant at the 95% confidence level or more (Neter et al., 2004). We also use the p-value to determine the MBI-10 MPOL MTUR exact confidence level. We calculate p-value by subtract- ing the p-value from 1 to find the confidence level. This MBI-10 1 number is simply the best point estimate given to our set MPOL 0,301031514 1 of sample data. We also present the result: Lower 95%. This gives us a range of values between which we can be MTUR 0,35701452 0,829008398 1 95% sure that the true value of this coefficient lies. Since we are merely using this forecasting model, the signifi- Table 8 provides correlations among two stocks and cance of the intercept is not important. In our regression MBI-10 at MSE. We can see lower but still positive cor- statistics, we asked for 95% level of confidence. relation among stocks and MBI-10. The difference of The results of descriptive statistics and regression correlation among stocks and MBI-10 compared with analysis of daily stock prices at MSE are given in the only mutual stocks correlation coefficients suggest that tables below, as follows: MBI-10 changes are not immediately followed by the other stocks on MSE. The conclusion about lower statis- Table 9. Descriptive statistics for MPOL and MTUR tical significance between stocks’ price movements and Descriptive statistics MPOL MTUR MBI-10 daily values can affect using MBI-10 for predicting tourist companies stocks’ market prices at MSE. This Mean 155,145749 3628,388664 finding will be tested by means of regression analysis. Standard Error 1,469944845 9,401201304

We explore the correlation of MSE stocks’ daily re- Median 165 3700 turns in order to determine mutual dependence and correlation of stocks returns as tools for stock value Mode 133 3700 forecasting. Using regression analysis we are trying to Standard Deviation 23,10199663 147,7514762 determine if there is a statistically significant relation- Sample Variance 533,7022481 21830,49873 ship between the variables (two stock prices or daily index values and stock price). We first analyze the Mul- Kurtosis 0,152006671 -0,779504843 2 tiple R (coefficient of correlation) and R Square (R ). Skewness -0,751649267 -0,649876471 The R2 is the coefficient of determination and tells us Range 99 500 the proportion of the total variation in the dependent- variable explained by the independent variable. If there Minimum 101 3350 is a stronger relationship (higher coefficient of deter- Maximum 200 3850 mination), it indicates that this relationship is statistically significant and prediction of dependent variable Sum 38321 896212 will be accurate if we have a good forecast of independ- Count 247 247 ent variable. By using variance statistics, we determine Confidence Level (95,0%) 2,895282921 18,51711489 f-test that confirms if regression analysis is statistically significant. A very low level of significance F value confirms statistical significance of the analyzed relationship. It is obvious from the results of descriptive statistics Next, we look at the t-statistics for our regression coef- that stocks at MSE have high volatility, negative skew- ficients. We analyze whether a t-statistic coefficient is ness and low kurtosis. Distributions with zero kurto- statistically distinguishable from zero (i.e. statistically sis are called mesokurtic. Normal distribution has zero significant). The magnitude of the coefficient is not the kurtosis. Distributions with high kurtosis distribution issue of our interest. If the coefficient for one stock price are called leptokurtic, and tend to have a distinct peak is significantly different from zero, then we know that near the mean, decline rather rapidly, and have heavy 219 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

tails. Distributions with negative kurtosis (platykurtic) determine f-test that confirms the significance of regres- have a flat top near the mean and shorter, thinner tails sion analysis. A very low level of significance F confirms (Ivanovski et al., 2015). statistical significance of the analyzed relationship. A t- The daily return series for MPOL stocks are lepto- statistics is high and confirms significance. We can also kurtic, while for MTUR is platykurtic. This means that see that p-value (probability value – that explains that significant variations in the daily prices are very com- results occur randomly) is zero, which means that we are mon. Both MSE stocks have large kurtosis values. 100% confident that our coefficient (MTUR) is signifi- In Table 10, we report the results of linear regression cant for predicting MPOL stock price changes. statistics for MTUR stock as dependent variable (Mul- Table 11 reports the results of regression analysis tiple R, R Square, Adjusted R Square, Standard Error, between MTUR and MBI-10, where MTUR stock price Number of Observations, df, SS, MS, Significance F, t Stat, as a dependent variable was tested using MBI-10 as P-Value) where MPOL stock is independent variable. independent variables. We did not find a statistically Table 10 reports the results of the stocks analysis significant relationship between MTUR and MBI-10 for two companies (MPOL and MTUR) Skopje) from index. Our findings are supported by low values for R tourism sector in the Republic of Macedonia. Values Square (13%) and appropriate values of t-statistics and for Multiple R (coefficient of correlation) and R Square p-values. (coefficient of determination, variance) for MTUR daily Table 12 provides multiple regression statistics re- stocks returns as dependent and MPOL as independ- sults for MBI-10 index. Multiple regression analysis is ent value are around 0,70, which leads to the conclusion not significant (Adjusted R2 is 12%), which indicates a that there is a statistical significant relationship between low level of relationship between MBI-10 and MPOL these two variables. In fact, there is almost 70% signifi- and MTUR stocks prices. Regression statistics confirms cant relationship between the outcomes and predicted our findings (with 95% level of confidence) that the pro- value. The R2 tells us that the proportion of the total portion of the total correlation in the dependent variable variation in the dependent variable (MTUR stock mar- (MBI-10 index value) cannot be explained by the inde- ket price) can be explained by the independent variable pendent variables (stock prices of tourism companies- (MPOL stock price). Using the variance statistics, we MTUR and MPOL).

Table 10. Linear regression statistics for MPOL & MTUR stocks

Regression Statistics

Multiple R 83%

R Square 69%

Adjusted R Square 69%

Standard Error 12,945

Observations 247

ANOVA

df SS MS F Significance F

Regression 1 90230,216 90230,216 538,3856 8,87958E

Residual 245 41060,5364 167,59402

Total 246 131290,753

Coefficients Standard Error t Stat P-value Lower 95% Upper 95%

Intercept -315,17097 20,286260 -15,536178 2,37898E -355,12869 -275,213

MTUR 0,1296213 0,0055863 23,20313 8,87958E 0,1186179 0,14062 Note: Significance at the 95% confidence level 220 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Table 11. Linear regression statistics for MTUR & MBI-10 Regression Statistics Multiple R 36% R Square 13% Adjusted R Square 12% Standard Error 138,2958571 Observations 247 ANOVA df SS MS F Significance F Regression 1 684495,3849 684495,3849 35,78921591 7,7476E-09 Residual 245 4685807,303 19125,7441 Total 246 5370302,688

Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Intercept 2225,192822 234,7186557 9,480255482 2,3043E-18 1762,868926 2687,517 MBI-10 0,789157538 0,131913006 5,982408872 7,7476E-09 0,529329299 1,048986 Note: Significance at the 95% confidence level

Table 12. Multiplied regression MBI-10 Regression Statistics Multiple R 36% R Square 13% Adjusted R Square 12% Standard Error 62,69011505 Observations 247

ANOVA df SS MS F Significance F Regression 2 140182,6 70091,3 17,83470697 5,90027E-08 Residual 244 958932,3 3930,051 Total 246 1099115

Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Intercept 1206,824914 138,4119 8,719084 4,4053E-16 934,1903024 1479,46 MPOL 0,046844974 0,309376 0,151418 0,879771452 -0,562543625 0,656234 MTUR 0,155441101 0,048373 3,213375 0,00148863 0,060158849 0,250723 Note: Significance at the 95% confidence level

two years (2014 and 2015) can be confirmed by stock CONCLUSION returns of tourism companies. In particular, we first identify the correlation between tourism companies’ This paper contributes to the determination of the stocks at MSE. By means of the regression analysis, we character of stock returns of tourism companies that can have determined a strong positive correlation between be used for stock valuation at MSE and as a performance stock prices at MSE (most of the values oscillate around indicator of tourism companies. 0.70). We determine lower but still positive correlation We try to identify if the official statistical data for among the analyzed stocks and MBI-10. The correla- tourism rise in the Republic of Macedonia over the last tion difference among stocks and MBI-10 compared 221 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

with mutual stocks correlation coefficients suggests that REFERENCES MBI-10 changes are not immediately followed by other stocks on MSE. Copeland, T., Weston, E., & Shastri, K. (2004). Financial The results of linear and multiple regression analysis Theory and Corporate Policy. New York: Pearson. lead us to the conclusion that there is a statistical sig- Damodaran, A. (2010). Applied Corporate Finance. New nificance between stock prices at MSE, as well as that York: John Wiley & Sons. regression analysis is a useful tool for stocks market De Santis, G., & Imrohoroğlu, S. (2009). Stock Returns prices forecasting at MSE. The research results identify and Volatility in Emerging Financial Markets. The that stocks from the same industry (tourism) have sta- Journal of Finance, 16(4), 22-37. doi:10.1016/S0261-5606(97)00020-X tistically significant relations. The2 R values confirmed that the proportion of the total correlation in the de- Fama, E.F. (1970). Efficient Capital Markets: A Review of Theory and Empirical Work. The Journal of Fi- pendent variable (one tourist company stock price) can nance, 25(2), 383-416. be explained by the independent variable (other stock Ivanovski, Z., Narasanov, Z., & Ivanovska, N. (2015). price) as well as that accurate forecasting of one stock Volatility and kurtosis at emerging markets: Com- price movements will lead us to reliable valuation and parative analysis of Macedonian Stock Exchange prediction of other stocks’ future price. and six stock markets from Central and Eastern Multiplie regression analysis is not significant (Ad- Europe. Journal of International Scientific Publica- justed R2 is 12%), which indicates a low-level relationship tions, 9, 84-93 between MBI-10 and MPOL and MTUR stocks prices. Ivanovski, Z., Stojanovski, T., & Narasanov, Z. (2015). Volatility and kurtosis of daily stock returns at We did not find evidence that the tourism growth MSE. UTMS Journal of Economics, 6(2), 209-221. of Macedonia identified by state statistics data have di- Kutner, M.H., Nachtsheim, C., Neter, J., & Li, W. (2005). rect influence on the stock prices rise of quoted tourism Applied linear statistical models. Boston: McGraw- companies at MSE Hill Irwin. We determine the statistical significance among tou- Mandelbrot, B. (1960). The Pareto-Lévy Law and the rism companies’ stocks, which leads us to the conclusi- Distribution of Income. International Economic on that we can use one stock price for other stock price Review, 1(2), 79-106. doi:10.2307/2525289 forecasting at MSE. This finding can be used for portfo- Mandelbrot, B. (1963). The variation of certain specula- lio management at MSE as well as tourism planning in tive prices. Journal of Business, 36(4), 394-419. the Republic of Macedonia. Markowitz, H. (1952). Portfolio Selection. The Journal of Finance, 7(1), 77-91. Mills, T.C. (1995). Modelling skewness and kurtosis in the London Stock Exchange FT-SE index return distributions. Journal of the Royal Statistical Soci- ety, 44(3), 323-332. doi:10.2307/2348703

222 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Quality and Competitiveness in Tourism and Hospitality Industry

Correlation between Quality Rating Systems and Profitability of Serbian Hotels

Slavko Alčaković, Abstract: The purpose of this paper is to investigate the connection between the quality Vule Mizdraković, rating systems and profitability of Serbian hotels. Having in mind that the hotel Vladimir Džamić industry is market-oriented with a high proportion of fixed costs in total costs, it is a great challenge for hotel management to maintain the profitability at a satisfying level in order to keep the business running. It can be presumed that the hotels that provide high-quality services will have better ratings, higher Singidunum University, demand, and therefore, better profitability in comparison to other hotels. In Belgrade, Serbia order to analyze the relationship between the quality ratings and profitability of Serbian hotels, the authors conducted research that included 51 hotels in the Republic of Serbia. The authors used multivariate analysis of variance (MANOVA) and Pearson’s correlation coefficient for the analysis of the results. The results reveal a positive correlation between the selected financial ratios (return on equity and earnings before interest and taxes to average total revenue) with the hotels’ official star ratings. Likewise, MANOVA showed a connection between the selected quality system ratings and financial ratios: retained earnings to total assets, profit margin and ROE.

Keywords: fixed costs, management, services.

Introduction

The tourism industry is one of the biggest industries in the world economy. According to the World Trade Organization (WTO), there were 1,184 million international tourists (overnight guests) in 2015, which is an increase by 4.4% in comparison to the year 2014 and 8.2% in comparison to the year 2013 (World Tourism Organisation, 2016). These industries showed a steady increase of 4% yearly ever since 2010 and the alleged end of the economic crisis until 2015. Regarding the separate regions of the world, the same organization claims that European countries recorded an even higher growth rate in 2015, around 5%, while Central and Eastern Europe recorded an increase of 6%. As noted, there are positive external effects on further development of the hotel industry in this region and therefore, in the Republic of Serbia. The Republic of Serbia is a country where people love to travel - some for city breaks or weekend Correspondence: Slavko Alčaković breaks, some for the summer holiday. In 2015, Lonely Planet, the world’s largest travel guidebook publisher, named Serbia one of the Top 10 most e-mail: attractive countries to visit in 2015, putting the country in the seventh [email protected] place, after Singapore, Namibia, Lithuania, Nicaragua, Ireland, Congo and 223 Sitcon 2016 Doi: 10.15308/Sitcon-2016-223-229 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

before the Philippines, St. Lucia and Morocco (InSerbia, ten than those staying at one- and two-star hotels (Cal- 2015). After 1999 and the end of political instabilities lan, 1995). Based on the above-mentioned, the authors in the region, the number of travellers increased over are interested in investigating whether there is a correla- the last decade. Borovčanin (2015) shows in his research tion between the quality rating systems and profitability (Figure 1) that the number of travelers has been con- of Serbian hotels. The research was conducted in 51 ho- stantly increasing, with a staggering increase in 2013. tels and included the analysis of profitability based on the financial statements and their rating systems (official star rating by government and booking.com rating). The paper is structured as follows: in the first part, we will explain the rating systems in Serbia and their importance. The characteristics of profitability in the hotel industry and the main financial ratios will be discussed in the second part. The final part elaborates on the research results, followed by conclusions and suggestions.

QUALITY RATING SYSTEMS

As previously explained, the increasing total num- Figure 1. Number of tourist overnight stays in the ber of foreign overnight stays and the actual number of Republic of Serbia for the observed period visitors creates the necessity for travellers to have some Source: Borovčanin (2015) kind of guide when choosing the accommodation. Most of them rely on a hotel’s rating. The WTO and the In- However, increased interest in Serbian hotels does ternational Hotel and Restaurant Association define not have to be directly associated with the increased the hotel rating as the classification of accommodation occupancy and profitability. Hotel management has establishments denoting a system, duly published, ‘in to keep the quality of facilities and service quality in which accommodation establishments of the same type check. At the same time, they have to keep profitability (e.g., hotels, motels, and inns) have been conventionally at a high level in order to survive the market competi- broken down into classes, categories, or grades, accord- tion. The increasing total number of foreign overnight ing to their common physical and service characteristics stays and the number of visitors creates the necessity for and established at government, industry or other private travelers to have some kind of guide when choosing the levels (WTO, 2014). accommodation (Borovčanin, 2015). Most of them rely The European Standardization Committee (CEN, on the hotel’s rating. The hotel rating system is mostly Comité Européen de Normalisation) clarifies the term used as an indicator of the hotels’ quality of service and ‘accommodation rating or classification scheme’ as ‘a their facilities. At the same time, rating systems can be system providing an assessment of the quality stand- used as a promotional tool, since hotel operators value ards and provision of facility and/or service of tourist the classification awards and grading as promotional as- accommodation, typically within five categories, often sets (Callan, 1989 ). Also, the same author claims that indicated by one to five symbols’ (WTO, 2004, p. 68). classification schemes provide a significant amount of The hotel rating systems can be divided into two business and demand for the hotels. Other researchers groups: official and unofficial (Qing and Liu, 1993). (Vallen and Vallen, 2005) showed that there is an ap- Official hotel rating systems are conducted by the gov- proximately 20% increase in sales among the top-rated ernment body, while unofficial hotel rating systems are hotels in the Mobile Guide and a 40% increase in busi- developed and implemented by private organizations, ness among small hotels rated in AAA, after hotels were such as hotel or tourism associations and national or awarded with classifications. Hotels also perceive ratings regional associations, on a voluntary participation basis as a pricing tool. Israeli and Uriely (2000) found that the by hotels. The quality level of the hotel is communicated price variations could be partially explained by star rat- with a variety of grading symbols, such as stars, crowns, ings, and the star rating system was a significant predic- diamonds, suns, or letters. The most universally recog- tor of hotels’ decisions in setting prices. When choosing nized symbol is the star, as most countries have at least hotels, customers who stay at three- to five-star (or other one rating system using stars to represent quality grades equivalent symbols) hotels use rating systems more of- (Callan, 1993; WTO, 2004). 224 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

In the Republic of Serbia, the official hotel rating is PROFITABILITY of SERBIAN HOTELS conducted by the Ministry of Trade, Tourism and Tele- communications. This government body issued the rule- Like all other business entities, hotels exist in order book in 2010 with the exact classification of the star level to make a profit by continuously creating value for the requirement. The criteria for categorization are classified customers. In order to maintain continuous business into two groups (MTT, 2012): operations, entities have to earn or create more value ◆◆ Mandatory elements that are not scored, with the invested capital. Namely, by performing the ◆◆ Elective or optional elements used for score main revenue-generating activity, an entity is using board. available assets and the costs are incurred. If total rev- Optional elements include the basic and additional enues are higher than total costs within a certain period services and supporting hotel facilities. Within the man- of time, the entity is deemed profitable. All market- datory and optional elements of the Rulebook, there are oriented businesses are, like the hospitality industry, 182 categories and 239 individual elements. For each relatively revenue dependent. Namely, they are usually category of hotel star rating, the facilities need to have required to maintain high revenues in order to break a certain number of points from the optional elements. even generate adequate profit returns and continue its More precisely, it is necessary that the hotel has a certain business (Graham and Harris, 1999). The problem lies number of points, in addition to all the mandatory ele- in different business characteristics, because hotels usu- ments: 30 points for 1 star, 50 points for 2 stars, 70 points ally have very high values of fixed assets. Those assets for 3 stars, 90 points for 4 stars and 110 points for 5 stars. include properties - land and buildings, equipment, ve- The authors want to emphasize that the classification hicles and even intangible assets, which are inevitable of tourism accommodation worldwide is a very difficult for performing hospitality services. Land and buildings process. Frédéric Pierret stresses two main reasons for usually have the highest proportion in total value of this situation: first, because of diversity of the type of fixed assets. tourism accommodation, and secondly, because of the Hotels have at least two options for obtaining these large diversity of classification systems that are them- valuable assets; they can buy them or lease them. Except selves embedded in highly different cultural and eco- for land (in some situations, even land is depreciated) all nomic contexts (Pierret, 2013). For that and many other other fixed assets incur depreciation and amortization reasons, no standardized international classification sys- costs. Even if the hotel lease asset and retain the incidents tem has been adopted (Čačić, 2010). Every country has of ownership, it should still depreciate those assets. Also, its own way of officially rating hotels, which in the end, if a hotel operates under franchise, the franchise fee will impacts the results of hotel categorization, where 5 stars usually be recorded as an intangible asset on the balance in London is not the same as 5 stars in Thessaloniki and sheet and amortized over a certain period of time. With so on. Also, you can find outliers with the zero hotel star regard to amortization calculation for tax purposes in rating in Switzerland (Null Stem Hotel) and seven star Serbia, franchise fees are amortized over a period of ten rating in the United Arab Emirates (Burj Al Arab Hotel). years using the straight line method. Franchise fees are Because of this information, travellers also rely on included in the second group of assets being amortized/ customer reviews. Booking.com is deemed one of the depreciated (Ministry of Finance RS, 2010). Therefore, best hotel booking sites that travellers use for booking hotels should expect high depreciation and amortization their accommodation and has useful customer reviews costs in their income statements, which will decrease (Top ten reviews, 2016). These reviews are considered their gross profit and EBIT (earnings before interest very useful because the customers need to have proof and taxes). This is the reason why hotels are considered that they stayed at the facilities, whereas for others (Trip market-oriented, since they have a high proportion of Advisor) they do not need to have proof, so anyone can fixed costs to total costs (Kotas, 1975). rate the hotel. At Booking.com travellers can rate: clean- liness, comfort, location, facilities, staff, value for money The problem of retaining the profitability at a re- and free Wi-Fi. They can use the following grades: 1–3 quired level by hotel management can be magnified by (Very poor), 3-5 (Poor), 5-7 (Okay), 7-9 (Good), 9+ the seasonal character of the hotel industry. In particular, (Wonderful). It is expected that the hotel with high offi- due to unstable demand, hotels have to plan and calcu- cial and unofficial ratings should attract more customers late the total revenues and costs for the whole season in and therefore, make more profit. However, that may not order to have balanced profitability. Industries character- always be the case because the hotel industry has some ized by high fixed costs, and hotels in particular, should specific characteristics. use the break-even concept as a useful managerial tool. 225 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

For example, they can calculate break-even occupancy. and families (Radojevic et al., 2015a). In the final part of In order to calculate this value, the total hotel contribu- the paper, the authors shall address the effect of quality tion margin should be divided by the number of rooms rating systems on profitability. occupied for the period. Then, the total hotel fixed costs should be divided by the contribution margin per room THE EFFECT OF QUALITY RATING SYSTEMS occupied (Graham and Harris, 1999). Also, the total ON PROFITABILITY OF SERBIAN HOTELS fixed costs could be increased with a planned amount of profit that the entity wants to generate, and thus, we In this part, we will present the results of the re- can calculate the required room occupancy in order to achieve the planned amount of profit. search that analyses the correlation of quality rating systems with the profitability of Serbian hotels. In order The profitability level of a certain entity can be meas- to analyze the profitability of sampled hotels, we needed ured by different financial ratios. The most commonly their complete set of financial statements. There were used are listed in the table below and will be used in our only 54 hotels that fulfilled that requirement and they research, which will be explained in the third part of the were included in this research. They are mostly large paper. However, there are a few financial ratios specific and medium-size business entities according to the of- to the hotel industry, and one of those is fixed assets ficial classification of business entities in the Republic turnover. This ratio is calculated when fixed assets are of Serbia. We gathered their financial statements for divided with sales revenue, and it indicates how much revenue the hotel earns with fixed assets in use. the observed period from the official site of the Serbian Business Registers Agency. The financial ratios related Efficiency and high quality of service certainly affect to the profitability of sampled hotels were calculated. the customer experience and ultimately a hotel’s profitability level. However, quality rating systems also affect The next step was collecting the data regarding the the customer experience. For example, the research, rating systems of the sampled hotels. We have the of- which included 6,768 hotels from 47 European capital ficial governmental star rating system for each hotel for cities, confirmed the findings of previous studies that the observed period. Out of 54 hotels, 51 had informa- the hotel star rating is the single most important factor tion on the official star rating and therefore, only they that influences the customer experience (Radojevic et were included in further research. The results show that al., 2015). One should bear in mind that the reported most hotels have three and four stars (35% for each level of satisfaction of a hotel customer depends on the group). We used the Booking.com rating system as a demographic categories, as well. According to Rado- comparable unofficial rating system. The results show jevic et al. (2015), solo travellers assign higher ratings that 27.8% of sampled hotels have ratings on Booking. than families. The authors argue that considerable dif- com between 8 and 9. However, 31.5% of sampled ho- ferences exist within the baseline level of satisfaction, tels do not have Booking.com ratings. We included in and that the importance of certain factors varies across the Appendix the table that presents the classification the categories: solo travelers, groups of friends, couples of sampled hotels per those two rating systems. During

Table 1. Financial ratios used in the research

Financial ratios No Minimum Maximum Mean Std. Deviation Retained earnings to average total assets 51 0.00 0.89 0.08 0.17 EBIT to average total assets 51 -0.15 0.94 0.02 0.14 Revenues to average total assets 51 0.02 3.45 0.38 0.55 Profit margin 51 -0.93 0.30 -0.09 0.28 ROE 51 -0.69 1.42 -0.02 0.27 Fixed asset turnover 51 0.00 0.95 0.30 0.24 EBIT depreciation to average total liabilities 51 -0.21 1.91 0.01 0.57 EBIT to total revenue 51 -3.40 0.38 -0.12 0.56 Revenue to average total assets 51 0.02 1.93 0.32 0.33 Source: Authors’ data 226 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Table 2. The influence factors on multivariate composite (profitability) - Multivariate tests

Quality rating system Wilksλ F Hypothesis df Error df Sig.

Booking.com 0.053 2.59 32 67.976 0.001

Official star rating 0.123 2.333 24 52.807 0.005

Source: Authors’ data

this research, we gathered the information regarding the Conclusions existence of an official internet web site for each sampled hotel. The authors found out that 90.2% of sampled Tourism is the fastest growing industry in the world. hotels have the official Internet web site used for promo- Due to economic globalization, the rise in the number tional activities. of foreign tourists has led to positive changes in the Ser- In order to analyze the data we used descriptive sta- bia’s economy, including the increased demand for Ser- tistics, which found the correlation between hotels’ of- bian hotels and the number of foreign hotel customers. ficial star ratings and ROE with significance at 0.031. Research has shown that the profitability of the hotel Out of other selected financial ratios, EBIT to total rev- industry largely depends on the official categorization enue showed a significant correlation with hotels’ offi- granted by the Ministry of Trade, Tourism and Tele- cial star ratings. Also, the authors employed MANOVA, communications of the Republic of Serbia, as well as un- and the results are presented in the following table. In official categorization, such as by Booking.com. Ranking MANOVA analysis, independent variables were ratings and categorization may suggest better quality of service on Booking.com and official star ratings, and dependent to potential visitors, which will lead to higher demand, variables were retained earnings to average total assets, and ultimately, hotels will earn more profit. However, EBIT to average total assets, revenues to average total the question that remains open for further research is assets, profit margin, ROE, fixed asset turnover, EBIT the official categorization of tourism accommodation at depreciation to average total liabilities, EBIT to total the global level and harmonization of different stand- revenue, and revenue to average total assets. ards in this field. Table 2 shows that there is a significant statistical influence of ratings on Booking.com (λ = 0.053; F=2.59; References df=32; p=0.001) and official star ratings (λ = 0.123; F=2.333; df=24; p=0.005 on selected financial ratios that Čačić, K. (2010). Poslovanje hotelskih preduzeća. Beo- measure profitability. grad: Univerzitet Singidunum. In Table 4 (Appendix), which presents the analysis Borovčanin, D. (2015). Comparative analysis of eeco- of the influence on single variables, it can be seen that nomic financial ratios of hotels with 4 star rating. ratings on Booking.com have the biggest statistical influ- Belgrade: Master thesis Singidunum University. ence on profit margin (ε²=0.567; F=8.194; df=4; p<0.001), Callan, R.J. (1995). Hotel classification and grading sche- and immediately afterwards, on retained earnings to to- mes, a paradigm of utilization and user characteri- tal assets (ε²=0.388; F=3.39; df=4; p=0.013) and then on stics. International Journal of Hospitality Manage- EBIT to total revenue (ε²=0.353; F=3.405; df=4; p=0.024) ment, 14(3-4), 271-283. and the lowest on ROE (ε²=0.33; F=3.079; df=4; p=0.013). doi:10.1016/0278-4319(95)00030-5 When the influence of the official star rating on individu- Callan, R.J. (1993). An appraisal of UK hotel quality gra- al financial ratings was analyzed, the results showed that ding schemes. International Journal of Contempo- the statistical influence exists only for ROE (ε²=0.339; rary Hospitality Management, 5(5), 10-18. F=4.28; df=4; p=0.014) and retained earnings to total doi:10.1108/09596119310046907 assets (ε²=0.324; F=3.998; df=3; p=0.019). Callan, R.J. (1989). Small country hotels and hotel award Detailed information regarding the effects of quality schemes as a measurement. The Service Industries rating systems on selected profitability financial ratios Journal, 9(2), 223-246. can be found in the Appendix. doi:10.1080/02642068900000026 227 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Graham, I., & Harris, P. (1999). Development of a Pro- Pierret, F. (2013). About Hotel Classification Systems. fit Planning Framework in an International Hotel Retrieved september 15, 2016, from World touri- Chain: A Case Study. International Journal of Con- sm organization: http://www2.unwto.org/agora/ temporary Hospitality Management, 11(5), 198-208. about-hotel-classification-systems doi:10.1108/09596119910272694 Radojevic, T., Stanisic, N., & Stanic, N. (2015). Ensuring InSerbia. (2015). Lonely Planet: Serbia one of Top 10 most Positive Feedback: Factors that Influence Custo- attractive countries to visit in 2015. Retrieved July mer Satisfaction in the Contemporary Hospitality 27, 2016, from InSerbia: Industry. Toursim Mangement, 51(1), 13-21. http://inserbia.info/today/2014/10/lonely-planet- doi:10.1016/j.tourman.2015.04.002 serbia-one-of-top-10-most-attractive-countries-to- Radojevic, T., Stanisic, N., & Stanic, N. (2015a). Solo visit-in-2015/ Travellers Assign Higher Ratings than Families: Israeli, A.A., & Uriely, N. (2000). The impact of star ra- Examining Customer Satisfaction by Demographic tings and corporate affiliation on hotel room prices Group. Tourism Management Perspectives, 16(1), in Israel. Tourism and Hospitality Research, 2(1), 247-258. doi:10.1016/j.tmp.2015.08.004 27-36. Top ten reviews. (2016). Hotel Booking Services Reviews Kotas, R. (1975). Market Orientation in the Hotel and - Top Best 2016. Retrieved July 27, 2016, from Ho- Catering Industry. Glasgow: Blackie Academic & tel booking services review toptenreviews: http:// Professional. hotel-booking-services-review.toptenreviews.com/ Ministry of Finance RS. (2010). Rules on the Classification Vallen, G.K., & Vallen, J.J. (2005). Check-in, check-out: of Fixed Assets on Groups and Depreciation Calcu- Managing hotel operations. Upper Saddle River, NJ: lation for Tax Purposes. Retrieved from Ministry of Pearson Prentice Hall. Finance: Tax administration: World Tourism Organisation. (2016). International tou- http://www.purs.gov.rs/sr/pravna-lica/pregled- rist arrivals up 4% reach a record 1.2 billion in 2015. propisa/pravilnici/321/pravilnik-o-nacinu-razvr- Retrieved July 27, 2016, from World Tourism Or- stavnja-stalnih-sredstava-po-grupama-i-nacinu- ganisation UNWTO: utvrdjivanja-amortizacije-za-poreske-svrhe.html http://media.unwto.org/press-release/2016-01-18/ MTT. (2012). Pravilnik o kategorizaciji sa prilozima. international-tourist-arrivals-4-reach-record- Retrieved July 27, 2016, from Ministarstvo trgovi- 12-billion-2015 ne, turizma i telekomunikacije: http://mtt.gov.rs/ WTO. (2014). The Joint WTO & IH&RA Study on Hotel download/PRAVILNIK%20O%20STANDARDI- Classification. Madrid: WTO. MA%20ZA%20KATEGORIZACIJU.pdf doi:10.18111/9789284407194

Appendix

Table 3. Classification of sampled hotels per rating systems

Booking.com rating Official hotel star rating

Number of Number of Rating Percent Number of stars Percent hotels hotels No rating 17 33.3 One star 1 2

Between 5-7 3 5.9 Two stars 8 15.7

Between 7-8 8 15.7 Three stars 19 37.3

Between 8-9 15 29.4 Four stars 19 37.3

Between 9-10 8 15.7 Five stars 4 7.8

Total 51 100 Total 51 100 Source: Authors’ data 228 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Table 4. The influence of individual variables if they are isolated - Test of Between - Subjects Effects

Type III Sum Mean Partial Eta Source Dependent variable df F Sig. of Squares Square Squared Retained earnings tototal Booking.com 0.15 4 0.037 3.97 0.013 0.388 assets EBIT to total assets 0.004 4 0.001 0.687 0.607 0.099

Revenues to total assets 0.082 4 0.021 0.426 0.789 0.064

Profit margin 1.139 4 0.285 8.194 0 0.567

ROE 807.96 4 201.99 3.079 0.034 0.33

Fixed asset turnover 0.083 4 0.021 0.351 0.841 0.053

EBITDA to total liabilities 9.743 4 2.436 0.061 0.993 0.01

EBIT to total revenue 0.373 4 0.093 3.405 0.024 0.353

Revenue to total assets 0.082 4 0.021 0.426 0.789 0.064 Hotels’ official Retained earnings tototal 0.113 3 0.038 3.998 0.019 0.324 star ratings assets EBIT to total assets 0.008 3 0.003 1.723 0.188 0.171

Revenues to total assets 0.052 3 0.017 0.361 0.782 0.041

Profit margin 0.216 3 0.072 2.068 0.13 0.199

ROE 842.339 3 280.78 4.28 0.014 0.339

Fixed asset turnover 0.03 3 0.01 0.167 0.918 0.02

EBITDA to total liabilities 21.902 3 7.301 0.183 0.907 0.022

EBIT to total revenue 0.184 3 0.061 2.241 0.108 0.212

Revenue to total assets 0.052 3 0.017 0.361 0.782 0.041

Source: Authors’ data

229 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Quality and Competitiveness in Tourism and Hospitality Industry

HOTEL IMAGE AS AN IMPORTANT PREREQUISITE FOR CREATING A COMPETITIVE ADVANTAGE

Daliborka Blazeska, Abstract: Tourism and hotel industry are showing the tendency of continuous and rapid Angela Milenkovska, growth on a global scale. The improvement of the working process is quite Marina Stojmirova remarkable, i.e. the quality of service, but also the construction of numerous new facilities, which together affect the competition in the international tourism market, where the Republic of Macedonia also gives its national tourism University of Tourism and Management in product. This paper pays special attention to the hotel service, as its inevitable Skopje, and irreplaceable factor determining guest satisfaction. In this paper, hotel im- Skopje, Macedonia age is particularly highlighted. Building and strengthening of the hotel image becomes one of the basic strategies for the consumers achieving greater value and better positioning in the market. The key question imposes as to how to build a good image of a hotel and identify the components that affect the hotel image. This paper analyses important components that affect the hotel image. To that end, research has been performed which confirms that the hotel image is created by products of services, location, clients, atmosphere, after-sales services and promotional activities.

Keywords: image, hotel, quality, clients, promotion.

Introduction

The business environment in which modern hotels operate is very complex. It constantly puts pressure on the hotel management requiring from them better quality of products and services, better customer service, lower price sales, environment protection, fast and timely deliveries (Singh et al., 2015). Also, globalization puts pressure on the hotels due to the intensified competition. In order to be successful in the market and attract consumers, it is necessary to approach to building key determinants that will lead to creating a good image and competitive advantage of the hotel (Barney, 1991). Whether it is about the process of purchasing products in the supermarket or the process of choosing certain type of banking, insurance or other type of service, the customer appears as a Correspondence: complex personality influenced by numerous factors. Image is one of the Daliborka Blazeska key factors that considerably affects customers when making decisions. e-mail: It builds the customer’s confidence and opens up a wide spectrum of [email protected] possibilities for easier and more effective market approach. 230 Sitcon 2016 Doi: 10.15308/Sitcon-2016-230-234 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

People often tend to mix the terms product image and is made within a short time period, but it is rather time brand. As it is well-known, image is a psychological con- and money consuming. Consumers rely on the hotel im- struction while the brand is a legal-trading construction. age as a perceptual reality when making the final choice. That means that the image is defined as an identity that That’s why we need to pay attention to its creation. presents a sum of the existing ways in which the hotel The subject of this research is: identifies itself among the consumers, the audience, the ◆◆ the role and importance of creating hotel image as shareholders etc. Image is building and is changeable be- an important determinant of success, cause it contains the perception of the audience for the ◆◆ recognition of elements that affect the image of hotel. Unlike image, identity is the real picture of the the store hotel. Image is the experienced quality for certain hotel versus the existing real quality of the hotel. Identity is ◆◆ elaboration of all pre-conditions for successful ap- a measurable while the image is an immeasurable vari- pearance of the hotel in the market and achieving able. To build a good image, it is necessary to pay special a competitive advantage attention to the quality of services, location, clients, at- This paper provides tips for successful creation of mosphere, after-sales services and promotional activities positive perception for a certain hotel. Although the (Connelly et al., 2015). All these components will make determinants for hotel image creation can change from the hotel recognizable for the targeted group. Usually, the one market segment to another, this paper still empha- image is not only a picture or presentation of a certain sizes the most important components which determine product, but the consumers also participate in its crea- whether the hotel is going to be successful or not. tion. Their feelings (related to certain product image) are the result of previous experiences, different beliefs, judg- IMAGE ments and opinions. So, the image includes the design of certain product or service, the quality, technical side, The hotel image is determined on the basis of the en- functionality etc. tire perception that the consumers have for that hotel. Therefore, image can be defined as “a set of beliefs, In fact, the image contains functional and emotional at- ideas and impressions of the person regarding a certain tributes. When determining the image of the hotels, it is object or institution”. It is a segment of market commu- required to take into consideration their products, service nication and its factors are: originality, real economic provided to customers, regular customers, location, if propaganda, brand recognition, appropriate manifesta- there is a parking space nearby, the atmosphere, the after- tion of the brand to the market, the role of the sales staff, sales services and the type of promotional activities ap- service quality etc. (Gambetti & Graffigna, 2015). In order plied (Gambetti & Graffigna, 2015). It is very important for the hotel to succeed in the market and to achieve a to take into consideration the image of the environment competitive advantage, it is required to have a targeted group of consumers. Their behavior should be analyzed where the hotel is placed. The management is interested constantly to see what type of services they prefer within in creating the best possible image (Conejo et al., 2015). certain period of life, when and how they use those ser- This means that the hotels need to affect the perceptions vices and how to create a loyal customer that will bring of consumers as much as possible in order to successfully long-term satisfactory profitability. Every hotel should attract them in the following period. If the hotel image is thoroughly study the reactions of consumers of the not good compared to the competition, it is reasonable to targeted group and conduct the appropriate marketing spend considerable amount of money to alter the opinion activities, promotion and set appropriate sales staff and of the target group. inventory and shape the infrastructure. It is required that more detailed studies observe the consumer behviour in THE QUALITY OF HOTEL SERVICE order to initiate activities for creation of more accept- AS A BASIS FOR IMAGE CREATION able services that will suit our target group. Appointing trained managing staff will keep the consumers in the long run, but the same staff can also attract new consum- In modern terms, the quality is a success factor, ers to increase the hotel profit. very important in the context of selling products and services. The availability of information at world level, METHODOLOGY the global competition and requirements and the reduced number of loyal guests, are imposing additional The paper underlines the importance of certain com- responsibilities to the hotel management, regarding the ponents in building the hotel’s image. We should know research of new ways for giving a quality product. Each that the creation of the hotel image is not something that hotel product is extremely complex, as it is a sum of 231 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

tangible and intangible elements of the offer which are RESEARCH closely linked and affect the guests’ pleasure. The quality of the hotel product depends not only on the quality of This research was conducted on a random selection the object, but also on the expertise and kindness of the of respondents in hotels in the entire country (Republic staff, access to the hotel, serving speed etc. That means of Macedonia) most of them being located in Skopje. that the quality of service is a basic factor for achieving The research was about the factors that affect the image profitability and market competitiveness. of each hotel. To that end, a questionnaire with open and closed questions was designed. The beginning of the COMPONENTS FOR image CREATION questionnaire consists of basic and demographic data, while the rest of the questions refer to the influence of the factors on the hotel image. This questionnaire was The concrete suggestions for creation of hotel image given to 500 respondents to obtain relevant data from in the Republic of Macedonia are the following: which the appropriate conclusions can be drawn. ◆◆ First, attention should be devoted to the choice of As to the main reasons that trigger consumers to buy the hotel location. It should be good and visible or use hotel products and services of a hotel, the follow- to consumers. The entrance should be large and ing results were obtained (Table 1). recognizable i.e. easy to see Based on the results obtained from the respondents, ◆◆ The space and functionality should also be satis- it can be noticed that the most common reasons why fied the consumers decide to buy products or use services of ◆◆ The furniture and interior décor must be at the some hotel are the quality and the location of the hotel. superb level. To be modern and design by superb The quality and the location affect the decision to pur- designers chase with 30%. According to the respondents, other ◆◆ The hotels should have a wide assortment in or- reasons that affect consumers are the hotel appearance der to satisfy the taste of larger number of con- with 12%, price with 6%, promotional activities with sumers 10%, employees with 4% and customers that purchase ◆◆ Quality sales staff that knows well the consumers there with 10%. and will influence them during the purchasing The following data were obtained concerning the process should be hired in the hotels importance of service for the hotel staff (Table 2).

Table 1. The reasons why consumers decide to buy or use hotel products and services promotional hotel appear- location quality price employees customers activities ance

30% 30% 6% 10% 4% 12% 8%

Figure 1. The reasons why the consumers decide to buy or use hotel products and services

232 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Table 2. The role of the hotel staff

is not important is important is very important

16% 32% 52%

Figure 2. The role of the staff in the hotels

In this chart, we can see that the role of the staff The chart shows that 62% of the respondents con- is not important to 16% of the respondents, 32% of sider that the promotion has a major impact on stimu- them consider it important, while 52% consider it very lating them to visit and the perception for creation of important. Based on that, it can be concluded that the hotel image, 33% of them believe that the promotional service provided by the personnel in the hotel is very activities don’t influence their visits to hotels and 5% of important for customer satisfaction. Due to this fact, the respondents do not know what to say. it is required to pay significant attention to this issue. As regards the issue of the medium that is best for As regards the question of whether the promotion promotion, the following results were obtained (Figure 4). of hotels affects the consumers’ perception and image According to the chart, it can be noticed that 15% of creation, the following data were obtained (Figure 3). the respondents consider that the television is best for

Figure 3. Influence of the promotion on the consumers’ perception and image creation

Figure 4. Which medium is the best for promotion 233 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

promotion, 13% believe that the radio is best for promo- goal. After some time, it will become a brand, which is tion, 8% consider that the newspapers and magazines what all hotels aspire to achieve. It still imposes as the are best for promotion, 20% consider that the promo- main conclusion that tourists prefer an integrated qual- tion will be most successful through the Internet, while ity level of the destination, which absolutely correlates 25% of them choose the combined promotion (televi- with the experiences concerning modern trends of tour- sion and internet), and 19% choose the combined pro- ism development. The quality of all individual services motion (radio and Internet). that make the destination image means systemic action of all factors of tourism development. Nonetheless, the RESEARCH RESULTS quality of service and employees as its immanent creators still remains the key factor towards fully gaining According to the results of the questionnaire, the fol- the trust of the guest and his/her reinstatement in the lowing conclusions could be drawn: hotel/ destination. ◆◆ There is interest in buying products and services of hotels that have established a positive image REFERENCES ◆◆ When buying a product or services, the customers make the decision because of the quality of Adcock, D., Halborg, A., & Ross, C. (2001). Marketing: products and services, but the location and ap- principles and practice. Edinburgh: Prentice Hall. pearance of the hotel are also very important. Barney, J. (1991). Firm Resources and Sustained Com- Promotional activities as well as the customers petitive Advantage. Journal of Management, 17(1), of the hotel also have a considerable bearing on 99-120. the consumers’ preference for certain hotel. Re- Blythe, J. (2005). Essentials of Marketing. Edinburgh: Pren- garding the price, it is not one of the most impor- tice Hall. tant factors because the products and services are Bonn, M.A., Joseph, S.M., & Dai, M. (2005). International branded and low prices cannot be expected versus Domestic Visitors: An Examination of Des- ◆◆ The service provided by the staff is also very im- tination Image Perceptions. Journal of Travel Re- portant in the purchasing process search, 43(3), 294-301. doi:10.1177/0047287504272033 ◆◆ Based on the questionnaire, we can conclude that Brodie,R.J., & de Chernatony, L. (2009). Towards new it would be nice to take promotional activities, conceptualizations of branding: theories of the mid- and the combination between the traditional and dle range. Marketing Theory, 1(9), 95-100. modern media is considered the most effective doi:10.1177/1470593108100057 medium. Conejo, F., & Wooliscroft, B. (2015). Brands Defined as Semiotic Marketing Systems. Journal of Macromar- CONCLUSION keting, 3(35), 287-301. doi:10.1177/0276146714531147 Macedonian customers want to visit hotels that are Connelly, B.L., Crook, T.R., Combs, J.G., Ketchen, D.J., well-known brands. The business environment in which & Aguinis, H. (2015). Competence-and Integrity- Based Trust in Interorganizational Relationships. modern hotels operate is very complex. In order for a Journal of Management. hotel to succeed in the market and attract potential con- doi:10.1177/0149206315596813 sumers, it is necessary to approach towards building po- Gambetti, R.C., & Graffigna, G. (2015). Value co-creation sitive hotel image. We must emphasize that great part between the ‘inside’ and the ‘outside’ of a hotel In- of hotels are aware of the fact that it is necessary to pay sights from a brand community failure. Marketing attention to significant components for building of the Theory, 2(15), 155-178. image such as the location, space and functionality of Kotler, P. (2003). Marketing Management. Edinburgh: the hotel, atmosphere, service quality provided by the Prentice Hall. hotel staff, the quality and assortment of products, as Singh, A., Saini, G.K., & Majumdar, S. (2015). Applica- well as promotional activities. If one hotel meets all tion of Social Marketing in Social Entrepreneur- these criteria, then it will surely have countless loyal ship. Social Marketing Quarterly, 3(21),152-172. consumers with the short-time period and achieve its doi:10.1177/1524500415595208

234 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Quality and Competitiveness in Tourism and Hospitality Industry

Electronic Meal Experience: the Analysis of best restaurants in Novi Sad

Snježana Gagić 1, Abstract: Social media is changing guest relationship and marketing strategies. Guest 2 Ana Jovičić-Vuković , reviews represent useful information for managers and allows them to learn Bojana Kalenjuk3, what people are saying about their restaurant and use it to enhance the overall 4 guest experience. This paper presents the results of the analysis of the best Marko D. Petrović five restaurants in Novi Sad, based on the customers’ reviews. The aim is to identify what quality factors make them the best ones. The data were gathered on TripAdvisor and include a content analysis of more than 1000 guest 1College of Management and Business comments. The qualitative method was used in order to find out the guests’ Communications, opinions about the restaurants and the factors that are crucial for the assess- Sremski Karlovci, Serbia ment of restaurant quality. 2Modern Business School, Keywords: Belgrade, Serbia TripAdvisor, social media, restaurant industry. 3University of Novi Sad, Faculty of Sciences, Department of Geography, Tourism and Hotel Management, Novi Sad, Serbia 4 Serbian Academy of Sciences and Arts (SASA), Introduction Geographical Institute “Jovan Cvijić”, Belgrade, Serbia Over the past years, the impact of social media has grown and is still growing (Tiago et al., 2015). Online restaurant review websites, such as TripAdvisor, help diners to express their satisfaction with food and service quality, but also to find a place to eat based on other guests’ reviews. These websites are designed to help the guests to find some basic information about the restaurant location, menus, photos, cuisine or other specifics. Textual comments posted by guests who experienced service and food represent the best recommendation for future diners. The number of reviews and guests indicates the popularity of a restaurant (Zhang et al., 2010). According to the NRA, social media are a very useful and effective strategy for attracting new diners. Restaurant managers should implement the social media strategy because of fact that they can communicate with guests without time restriction (Kim & Ko, 2012) and they can have access in one place to the report about guest satisfaction or dissatisfaction. Furthermore, managers could build a strategy for quality improvement Correspondence: Snježana Gagić based on guests’ comments. Based on the analysis of comments, it is possible to identify the segments that function perfectly and those that need e-mail: certain improvements. Managers have to reply to diners because poorly [email protected] managed social network can even destroy a business (Kim et al., 2015). 235 Sitcon 2016 Doi: 10.15308/Sitcon-2016-235-242 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

The fact is that many guests consult online guide and to generate positive comments by analyzing the guests’ social media sites more often than friends or relatives. needs and by offering them high-quality services that Positive comments have become the main means of pro- would enhance their satisfaction and stimulate them to motions for some restaurant in tourist cities (Pantelidis, leave positive comments. 2010). The quality of service and food is the crucial factor that stimulates diners to leave comments (Longart, TripAdvisor 2010). According to Lang (2011), guest satisfaction depends on waiting staff friendliness and their interaction, Numerous Web 2.0 e-commerce and m-commerce hygiene, outcome of service encounter, and the price. applications have been made available specifically for This paper presents the results of the analysis of the best online consumer reviews. A few examples of Web 2.0 five restaurants in Novi Sad based on the customers’ re- applications that enable consumers to rate and provide views. The aim is to identify the attributes of a restaurant recommendations on tourism-related service provid- quality (food and wine, service, value and atmosphere) ers include InsiderPages, PassportStamp, TravBuddy, posted on websites that are most important for attracting TripAdvisor, CouchSurfing and WAYN. TripAdvisor online users to a restaurant. The data were gathered on was founded in 2000 for the members of the public to TripAdvisor and include a content analysis of more than review businesses and events online. More than 170 1000 guest comments, which were analyzed in detail. million reviews are currently listed. TripAdvisor.com is claimed to be the largest site that provides candid con- Literature review sumer reviews, both in text form and photographs, on travel destinations, hotels and restaurants worldwide Word-of-mouth in the hospitality industry (TripAdvisor, 2014). On the other hand, social media sites have certain limitations. According to O’Connor Consumers have very limited direct information on (2008), consumer recommendations can be manipu- the quality of products bought sporadically or distance lated in social media sites to cite in favor of or against a purchased products. For this reason, they often rely on particular service provider because of the anonymity of external sources. Professional reviewers were the main online reviewers. Nevertheless, several tactics have been external source of information for a considerable period employed to prevent deceit on social media sites (Ott et of time, but their reach in large dispersed markets was al., 2012). Many online reviewers on TripAdvisor are limited and not perceived as independent by consumers not first-time reviewers, but long-time contributors of (Sparks et al., 2013). Online user generated content has a large number of reviews. Therefore, the possibility of replaced professional reviewers. This new source of in- distortion of facts to influence public opinions is low. formation offers a richer and more varied set of reviews with a significantly wider coverage of products. In addi- The TripAdvisor Popularity Index is what determines tion, it brings heterogeneous tastes and standards of the which properties are listed first when a user searches for reviewer into the framework (Viglia et al., 2016). accommodation (or dining or activities) in a particular WOM is a powerful tool for attracting and retain- area. The Popularity Index ranking of a property has al- ing guests in hospitality industry. Electronic word-of- ways been influenced by three factors: the quality of re- mouth in restaurant industry could be defined as in- views, the revision of reviews and the number of reviews. formal communication between guests who would like The 2016 update to the Popularity Index algorithm still to share their positive experience online (Stokes and relies on these three factors, but has been refined to pre- Lomax, 2002). Numerous researchers have investigated sent new and established hotels side-by-side more fairly factors that influence WOM because of its influence on (www. blog.guestrevu.com). customer behavior. Henning-Thurau, Gwinner, and Gremler (2002) found relationships among customer Methodology satisfaction, commitment and WOM. They concluded that there is a strong relationship between satisfaction This study uses secondary data and follows a content and commitment, and both satisfaction and commit- analysis approach. Consumer reviews on TripAdvisor. ment were the main impulse for WOM. Research ob- com concerning the first five restaurants in Novi Sad tained by Kim, Han, and Lee (2001) also pointed out are carefully examined. Comments about the quality to the connection between relationship quality, com- are grouped into four categories: food and wine, service, mitment and WOM intentions. According to Keaveney value and atmosphere. The analysis pointed out to the (1995), negative WOM is the result of customer dis- quality attributes that make this restaurant the best and satisfaction. Restaurant managers should find the way the activities that enhance guest satisfaction. 236 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Results and discusion could be a good choice for those who prefer mediterranean or international cuisine, vegetarians or wine lovers. Restaurant analysis There are no negative comments about the food. Guests give the highest grade for food. They believe that Zak is Project 72 Wine & Deli restaurant in Novi Sad has a real gastro experience, a place with a rich and diverse the best rankings on TripAdvisor. In their promotion, menu, exceptional gourmet food, exquisitely planned, they said that Project 72 Wine & Deli restaurant is not special and unique dishes, lovely selection of cheese and an ordinary restaurant, but a place of exquisite taste, local wines. where fine food is prepared with a lot of imagination Although Zak is the second-ranked restaurant, there and soul that go along with finely selected wines in per- is obviously a gap between customers’ expectations and fect harmony with guest’s senses. It is a restaurant where their perception of the service provided. There are more everything is about food and wine pleasure. negative than positive comments about service quality. According to the results from Table 1, the majority This is an indicator that the staff should be trained better, of guests are satisfied with the food, service and the at- especially in the restaurant which has high prices even mosphere while there are some remarks about the price- for European standards. Satisfied guests said that staff quality ratio. is friendly, professional, knowledgeable, supportive, pa- According to guest’s comments, Project 72 Wine & tient, and pleasant, while others think that service was Deli restaurant managers innovate their menus in order average and they need to be better trained. Some of them waited long for everything, experienced bad staff behav- to respond to modern food trends and create the kind of ior, noticed staff arguing, staff sweating etc. offer that is in accordance with the guests’ current demands. The healthy diet trend and consumers’ knowled- Comments on atmosphere are mostly positive such as ge about the connection between nutrition and health nice location, beautiful interior, nice piano playing, and have led to the increase in consumption of light meals beautiful courtyard, but there are those who expected with reduced-fat content, fish, salads etc. This trend is more. For some guests, ambience is rather poor, sheets recognised in this restaurant. and the interior have to be improved. Some noticed the lack of respect for non-smoking guests. In this restaurant, Guests liked unusual but interesting menu, unique a lot of people smoke and the smoking area is quite small. food selection, creative and beautiful food presentation, vegeterian options, organic vegetables, home-made Bistro La Mer is a restaurant, wine bar and wine shop. bread and great wine selection. Some guests considered This restaurant boasts more than 160 wines from France, portions really tiny and extremely small, which further Italy, Chile, Argentina, New Zealand, Australia, as well resulted in their dissatisfaction. as from Fruška Gora (wines made from autochthonous grape varieties). According to their comments, guests’ Waiting staff in Project 72 Wine & Deli is very edu- dining experience was positive, especially in terms of cated, trained and knowlegeable, which affects the over- food quality. There were no negative comments about all guest satisfaction. According to guests’ comments, the quality of food. Visitors said that the food is extreme- they are kind and caring, helpful, friendly, attentive, as- ly delicious and creatively served, healthy and tasty, fresh serative, professional, dedicated, polite and speak Eng- and well prepared. An impressive wine card enhances lish fluently. guest experience. Waiting staff in this restaurant is very Opinions about the price depend on guest’s place of pleasant, educated, charming, polite, friendly, attentive living. Most of our guests consider this place overpriced, and professional. There are no positive comments about while foreigners consider the price reasonable and in the price, but some of them found that this restaurant is correlation with the quality and service. very expensive and the value of what they are experinced Athmosphere in Project 72 Wine & Deli restaurant is not equal to the amount they paid. is rather pleasant, there is a good choice of music, and Apart from bad ventilation, there were no negative décor is attractive, warm and romantic. Some guests comments about the restaurant atmosphere. Visitors said that the parking is always a problem and that they like the music, interior and pleasant atmosphere in this don’t like the restaurant location. restaurant. In this restaurant, the guests receive a small “gift bag” The restaurant Plava Frajla is a place where visitors with a jar of honey or jam. This gesture fascinates guests could experience authentic Serbian food and wine. Ser- and enhances their overall experience. bian gourmets view this restaurant as the top quality Restaurant Zak is an international restaurat located restaurant because of the delicious domestic food, good in the city center. According to guests’ comments, this wine selection and large portions. Complaints about 237 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Table 1. The analysis of guests’ comments on Project 72 Wine & Deli restaurant

FOOD & WINE SERVICE VALUE ATMOSPHERE

+ food is first class, food is excellent, staff is very sup- value for money nice and quiet extremely tasty, fresh and mostly or- portive, was unbelievable (it nice decoration, ganic food, service couldn’t be is not expensive) cute terrace out- food is absolutely great, dessert is per- better, good value for side, fect, very kind and help- money, great atmosphere, good wine list, food & wine matching ful, ridiculously low attractive indoor tasty food, perfect food, fantastic food, service was perfect, price, and outdoor seat- unusual but interesting menu, great brilliant service, inexpensive pricing ing, wine selection, friendly and atten- decent prices, so cool and relaxed, very brave mixture of tastes and excel- tive, price is reasonable very nicely deco- lent combination with different vegeta- very knowledgeable due to the quality rated venue, ble mishmash, waiter, and service, well chosen back- unique food selection, excellent wine dedicated host, average price. ground music, selection, staff is educated, atmosphere was food was outstandingly good, a range waiter was the best perfect, of unusual dishes, beautifully served, you can have, cozy atmosphere, food was spectacular, even though I am service was really decor is eclectic, vegetarian, I found the food absolutely impressive, decor is lovely, delightful, very good quality of ingre- service was flawless, perfect ambient dients, fresh home-made bread was service is impec- pleasant atmos- so tasty superb national food quality, cable, phere, nice music, creation of the talented chef, modern very polite stuff, romantic, good cuisine nicely served, modern restaurant service was also music serving worldwide top food with tradi- world class, fabulous ambience, tional Serbian ingredients, great choice waiter speaks Eng- very friendly and of non alcoholic and alcoholic cocktail, lish well, warm. traditional or international, meat or staff is highly pro- fish, always delicious and creative, menu fessional, creativity, interesting and imaginative very assertive, dishes, with meat, sea food and organic natural hospitality vegetables prepared with love of the waiters.

- the food was nothing special at all, waiter was inatten- it is overpriced, location is not that food is average, tive a little bit pricy, great portions are really tiny, waiter trying to just a bit more the parking is al- portions extremely small, over serve us, expensive than the ways a problem they don’t have everything what’s on the waiters were hor- average restaurant, menu. rible, they were is a bit costly for coming to ask us everyday visits, something every quite expensive, five minutes, inter- wine is very ex- rupting our conver- pensive, prices are sations. unreasonably high for the value

Plava Frajla are related to the lack of innovation. There are overpriced and guests consider bread price very are no signature dishes, plates are oversized and there is high. They are satisfied with the hygiene, music and in- nothing new in the food offer, despite the fact that it is terior, but smoking is an issue for non-smokers. quite delicious. The restaurant Fish & Zeleniš is located in the city Mostly, staff behavior made visitors satisfied. Wait- centre. It offers authentic, Mediterranean style dishes ers left bad impressions as they don’t speak English well. (fresh fish, seafood, organic vegetables, homemade pas- In most cases, prices are affordable and there is a ta, Greek and Dalmatian regions, salads, olive oil and good perception of value for money. Some local wines Mediterranean spices). 238 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Table 2. The analysis of guests’ comments on Zak restaurant

FOOD & WINE SERVICE VALUE ATMOSPHERE

+ top quality food, special and unique, friendly staff, good it’s not cheap but nice location and food was brilliant, real gastro expe- sommelier, for quality it has, it interior, rience, menu variety professional staff, represents very good beautiful interior, great selection of local wines, food knowledgeable staff, “d e a l ”. nice piano playing, is tasty, juicy, and fresh, excep- excellent sommelier, discreetly in the tional gourmet food and exquisitely service is exquisite, background, planned dishes, good selection of attentive, warm and the atmosphere of different kind of meat dishes, fan- pleasant, excellent Zak is inviting, relax- tastic food quality, lovely selection service, ing and calming, of cheese, nice wine cellar, menu is very good and sup- lovely courtyard in extremely exotic, rich and diverse portive, summer. menu. service is friendly, patient

- waitress service was more expensive than a lot of people smoke, average, an average place in there is a non smok- waiters need to be Novi Sad, ing room with one trained better, too expensive. table, service could be unexpected cost for a nice interior, but with better basket of bread, no respect for non waiting for every- lost a little bit on smoking guests, thing is long, quality but not on the interior could be rude an unpleasant prices, improved, stuff, guest had unexpected loud talking and wait whole hour expenses, shouting is a habit, between starters & too expensive even modest sheets on main course, for the European tables, waiter took guest’s standards, ambience was very credit card and very expensive for poor, disappeared without Serbian standard. atmosphere is a bit saying anything, plain. the waiters were almost fighting in front of us, impolite and unpleasant, very unprofessional,

This restaurant has 432 reviews. Visitors are very sat- he has the same approach to staff selection and training. isfied with food because of the fresh and local ingredients Visitors noticed that the staff is very educated, trained, and different and delicious food flavor. There is a good kind and caring, professional, helpful, friendly, attentive, choice for vegetarians, which is not typical in Serbian assertive, dedicated, polite and speaks English well. restaurants. Guests are satisfied with how the food is Opinions about the price are rather polarised. Visi- prepared and served and with homemade bread, which tors liked the ambience of this restaurant. Most of them enhances their overall experience. said that the ambience is great, warm and pleasing. They Comments about the service quality are almost same like the music, decoration and a rustic and authentic as for Project 72 Fine & Deli. The reason is that the own- style. er of those restaurants is the same person. Obviously, 239 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Table 3. The analysis of guests’ comments on Bistro La Mer restaurant

FOOD & WINE SERVICE VALUE ATMOSPHERE

+ food is extremely delicious and perfect service, staff excellent atmosphere, presentation was, like the food, full is always friendly, nice music and of creativity, tasty food and wine, good and fast service, atmosphere, healthy & tasty food, fresh sea food, perfect staff, service very nice interior, sophisticated food, very well was excellent, pleasant music, prepared, the best selection of wines, pleasant and friendly atmosphere, food was excellent, educated, polite staff, always positive and modern menu, impressive wine card. staff is very charming good atmosphere, and friendly, beautiful and warm very informed, interior sommelier was good, service is very friendly, but also well-educated and professional

- Service average food is too expensive bed ventilation (bed and nothing special, tobacco smell) very expensive, meals are a bit prices were much higher than on the site (30-40 % higher)

Table 4. The analysis of guests’ comments on Plava Frajla restaurant

FOOD & WINE SERVICE VALUE ATMOSPHERE

+ food is really great, authentic waiters are highly prices are really fair nice family interior, dining experience, delicious skilled, for what you get, typical Serbian domestic food, fresh food, big good communication, prices are ok, interior, very clean portion, very delicious Serbian experts, prices are affordable place, enjoy the food, portions are huge and nice and quick staff, sounds of the local equally delicious, good local wine, very friendly, waiters music instruments were good humored (e.g. Serb. Tamburica), and professional Interior is very picturesque, ambience feels is very elegant, clean and interesting.

- most of the dishes we wanted to staff didn’t speak prices are a bit larger smoking is allowed, try were not available, it doesn’t English than in similar everything inside the have a signature meal, arguing of the waiters restaurants, restaurant is old and plates oversized and it’s too salty argued in front of the bread price is too they should change, and simply horrible, food was guests high, tablecloths, tables greasy too salty and took me two some local wines over days to digest, portions are quite priced big but unfortunately not always tasteful meals are great, but not innovative

240 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Table 5. The analysis of guests’ comments on Fish & Zeleniš restaurant

FOOD & WINE SERVICE VALUE ATMOSPHERE

+ fresh ingredients, good server is excellent, well decent prices, ambience is great, vegetarian options, good local trained staff, reasonably priced, ambient is gorgeous, Serbian wines by the glass, friendly and fantastic value for cozy atmosphere, fresh and local ingredients, attentive, good incredible food. restaurant is rustic and organic salad, food is superb, recommendations, authentic, homemade bread, good nice & friendly most creatively selection of wine, different waiters know how to decorated restaurant, & delicious flavor, dishes present the food, cute décor, deco were imaginative and very helpful staff, splendid inside is very warm well executed and presented, service, and welcoming, good creative and well balanced personnel speak music, use of ingredients, dishes are English, first-class intimate atmosphere, made with lots of love and service, professional atmosphere was lovely imagination, perfect and and attentive, and quaint large, great and well served, kind and helpful, pleasing, unique and incredible ingredients and fresh knowledgeable and original restaurant, food, fresh fish and delicious efficient, staff gave whimsical atmosphere sea food us some useful and decorations information about the city, entertaining staff, attentive service, very polite and professional manner

- different food-same taste slow service very expensive, cars passing by your bit small portions servers were a little bit very high prices, table at one meter forgetful too expensive, approx. a little bit expensive

Conclusion grown groceries that will The data were gathered on dietary habits have been changed and determined by cur- The Internet has proved to be the most efficient rent gastronomic trends. A good selection of interna- media for communication with clients. What is typi- tional and domestic wines is expected to enhance guest cal nowadays is the possibility for every guest to par- experience. Highlighting local and national dishes on ticipate in the restaurant marketing activities: by leav- the menu pleases those guests who are searching for an ing comments on online portals and social networks, authentic national cultural experience, and, at the same time, it promotes and popularizes the national gastron- the guest creates the restaurant image and influences omy. The same effect will be obtained through the offer potential guests. By being present on social networks, of autochthonous wines, while the gastronomic offer will restaurateurs learn about consumer trends and commu- be enhanced by an adequate selection of this beverage. nicate with clients, allowing them to define their goals In order to achieve satisfactory business results, a and develop their own business policy. The analysis of good food and beverage offer is not enough, as it is also guests’ comments on TripAdvisor has shown that res- necessary that the restaurateurs have well trained staff. taurateurs should work on creating new gastronomic Most of the reviews were related to service quality. Wai- products that will replace the old ones. Innovations re- ting staff should be educated, trained, professional, kind lated to this business segment are considered essential and caring, helpful, friendly, attentive, asserative, dedica- for the prosperity and business enhancement, evolving ted and polite. Guests expect that the waiting staff speaks from a strategic option to a mandatory management foreign languages, at least English. They appreciate when task. Nowadays, guests expect well prepared fresh the server knows the menu well and helps them with the food made of local ingredients, different and delicious choice of their meal and gives them information on the food flavor, good food presentation, vegetarian dishes, origin of vegetables or other ingredients, how the food gluten-free dishes, homemade bread, wholegrain bread is made etc. Staff who is always taking time to attend and dough, sweets for diabetics, as well as organically the guest with the greatest care is a way to retain guests. 241 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

A small gift is a nice way to enhance guest satis- Kim, A.J., & Ko, E. (2012). Do social media marketing ac- faction and increase the oportunity to generate word tivities enhance customer equity? An empirical study of mouth promotion. It could be a cake, a small jar of of luxury fashion brand. Journal of Business Research, honey or jam, a basket of mixed bread and delicious 65(10), 1480-1486. doi:10.1016/j.jbusres.2011.10.014 homemade hummus or a glass of wine. Kim, S., Koh, Y., Cha, J., & Lee, S. (2015). Effects of social The standard of living in Serbia is quite lower than media on firm value for US restaurant companies. in most European countries, and thus the habit of eat- International Journal of Hospitality Management, 49, ing out is still inaccessible and expensive. The guests 40-46. doi:10.1016/j.ijhm.2015.05.006 percieve the analyzed restaurants as mostly overpriced, Kim, W.G., Han, J.S., & Lee, E. (2001). Effects of relation- while foreign guests consider the price reasonable and ship marketing on repeat purchase and word of mouth. in agreement with the quality and service. Journal of Hospitality and Tourism Research 25(3), 272- 288. doi:10.1177/109634800102500303 Guests often observe the interior, which affects their pleasantness in restaurants. According to guests’ re- Lang, B. (2011). How Word-of-mouth Communication Var- ies across Service Encounters. Managing Service Qual- views, the atmosphere in best restaurants in Novi Sad ity, 21(6), 582-598. doi:10.1108/09604521111185592 is warm and pleasing. Guests like music, decoration and the rustic and authentic, as well as modern style of Longart, P. (2010). What drives word-of-mouth in decoration. restaurants? International Journal of Contem- porary Hospitality Management, 22(1), 121-128. Many guests share their true feelings about a product doi:10.1108/09596111011013516 or service online, no matter if it is a negative or pleasant O’Connor, P. (2008). User-generated content and travel: A experience. Restaurant managers should be aware of the case study on Tripadvisor.com. In Information and importance of online promotion and communication communication technologies in tourism 2008 (pp. 47- with guests. When a consumer reports a service failure 58). Vienna: Springer. doi:10.1007/978-3-211-77280- issue online, managers can respond with a solution or 5_5 method to address the problem, which may lead to re- Ott, M., Cardie, C., & Hancock, J. (2012). Estimating the vealing the source of complaints, restoring customer prevalence of deception in online review communi- satisfaction, and preventing the customers from going ties. In Proceedings of the 21st international conference to competition. They should use negative guest com- on World Wide Web (pp. 201-210). New York: ACM. ments to improve the quality of service and products. doi:10.1145/2187836.2187864 Pantelidis, I.S. (2010). Electronic meal experience: A Acknowledgement content analysis of online restaurant comments. Cornell Hospitality Quarterly, 51(4), 483-491. The research was supported by the Ministry of Edu- doi:10.1177/1938965510378574 cation, Science and Technological Development of the Sparks, B.A., Perkins, H.E., & Buckley, R. (2013). Online Republic of Serbia (Grant III 47007). travel reviews as persuasive communication: The effects of content type, source, and certification logos on consumer behaviour. Tourism Management, 39, References 1-9. doi:10.1016/j.tourman.2013.03.007 Tiago, T., Amaral, F., & Tiago, F. (2015). The Good, the bad Back, K., & Lee, J. (2009). Country club members’ per- and the ugly: food quality in UGC. Procedia-Social ceptions of value, image congruence, and switching and Behavioral Sciences, 175, 162-169. doi:10.1016/j. costs: An exploratory study of country club members’ sbspro.2015.01.1187 loyalty. Journal of Hospitality and Tourism Research, 33(4), 528-46. doi:10.1177/1096348009344232 Viglia, G., Minazzi, R., & Buhalis, D. (2016). The influence of e-word-of-mouth on hotel occupancy rate. Internation- Henning-Thurau, T., Gwinner, K.P., & Gremler, D.D. (2002). Understanding relationship marketing out- al Journal of Contemporary Hospitality Management, comes: An integration of relational benefits and re- 28(9), 323-331. doi:10.1108/IJCHM-05-2015-0238 lationship quality. Journal of Service Research 4(3), Zhang, Z., Ye, Q., Law, R., & Li, Y. (2010). The impact of 230-247. doi:10.1177/1094670502004003006 e-word-of-mouth on the online popularity of restau- Keaveney, S.M. (1995). Customer switching behavior in rants: A comparison of consumer reviews and editor service industries: An exploratory study. Journal of reviews. International Journal of Hospitality Manage- Marketing, 59(2), 71-82. doi:10.2307/1252074 ment, 29(4), 694-700. doi:10.1016/j.ijhm.2010.02.002

242 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Quality and Competitiveness in Tourism and Hospitality Industry

HOSTEL CATEGORIZATION AS AN ASPECT OF IMPROVING MARKET POWER OF DOMESTIC ACCOMMODATION FACILITIES

Jovan Vukotić Abstract: Hostels as well as restaurants with the specific hotel organization characteristics, spatial distribution, as well as technological and other requirements in the provision of accommodation services, with its unique offer of accommodation HMC – Hotel Management Company, facilities, have provided their own importance and positioning worldwide. Belgrade, Serbia Their recognition and demand in the wider tourism market have triggered a significant offer of hostel accommodation facilities, specially profiled and targeted at younger groups. The special role of hostels within the overall demand and recognition of the broader market is also necessary to improve the classification of their own level of quality, market power and clear attitude of the regulated offer, all types of accommodation facilities, specific and unique tourism market. Significant upgrading of the role of the hostel within the total supply of accommodation capacities in the domestic tourism market is reflected in the creation of necessary conditions for quality standardization and hostel categorization, which is the best way to define the city and market position of the hostel. The strong interdependence with other forms of accommodation as well as the need to define the level and quality of sorted standards, defines the uniqueness of the hostel type and quality along with improving the strength of the local accommodation facilities.

Keywords: classification, quality, market competitiveness, interdependence, improvement.

Introduction

Youth tourism is a special form of universal tourism activities that require the defined and applicable requirements and market implementation. It is characterized by creativity, need for socializing and communication research character of young service users with the full responsibility of key stakeholders, especially in the processes and stages of tourism organization, execution and monitoring (Jovanović, 2013, pp. 172-173). Balanced and institutionally regulated relationship of various accommodation facilities is an important precondition for stable functioning of the tourism market based on the clear standards and categorization of Correspondence: all forms of hostel accommodation and other facilities for young peo- Jovan Vukotić ple. Institutional regulation of relationships between various accommo- e-mail: dation conditions is the stable and organized business and realization [email protected] of anticipated economic effects. Domestic accommodation facilities are 243 Sitcon 2016 Doi: 10.15308/Sitcon-2016-243-249 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

categorized by defined laws and regulations. These in- es in 2014, with 1,628,907 beds and 35,806,968 overnight clude hotels, motels, tourist resorts, camps, pensions stays. These data continuously vary recording the change and the annex, immediately categorized by the relevant and significant economic expansion with the annual re- ministry, as well as houses, apartments, rooms and ru- venue of about $ 15 billion. Germany, with around 252 ral tourist households, which in practice categorizes the registered hostels as well as England, France, the USA designated authority of the local government. and Australia are the countries with the most important Recognizing the importance of the hostel, the need and most professionally organized hostel accommoda- for institutional and qualitative regulation of this type of tion facilities and capacity, quality, safety and revenue 1 service and the possibility of rapid development, has led in the industry. According to the previously conducted to the necessity of a unified classification in relation to statistics, youth traveling is considered to make up about the overall quality level of accommodation and tourism 1/5 of total tourist trips, according to the UNWTO, and offers. Clearly defined market positioning within the around 30% of travel are realized by young people, which single domestic market and accommodation service, is why oscillations of youth work to the hotel, or the so- will mean the clear institutional and economic support called hostel are not surprising. to the development of hostels and regulations of rela- Characteristic demarcation: Developed long and typi- tions of the key types of accomodation. cal business practice in the hostel industry in the domestic and broader international markets, particularly the Results and Discussion experience of the international hostel organization “Ho- stelling International” contributes to the identification of a set of positive values and characteristics that have made The prinicpal focus of this research is youth tour- this lodging achieve the sustained market positioning. ism and comparative definition of hostel facilities and “HI” over the rules of conduct and quality standards activities in relation to the total capacity of categorized contributes to establishing minimum quality standards domestic housing and real impact on the single market necessary for the achievement of applicable roles in the offers of accommodation capacities. The uniqueness and wider tourism market. synergistic cohesion of accommodation facilities in the The fulfillment of minimum conditions of internati- single tourism market is a clear precondition for im- onal “HI” sign of quality, as well as harmonization and proving the overall functioning of the same. Hostel cat- evaluation in practice, have established evaluator quality egorisation is performed according to the level of quality standards, following the general conditions and specific standards contribution to the qualitative and quantita- binding criteria in practice, such as hospitality, cleanli- tive improvement of the tourism market forces, the ness, security, privacy and comfort. Hostelling Intentai- development of underdeveloped tourism locations and onal classification identifies three categories of classified destinations, raising the standards of quality accommo- standards of quality: The lower grade (exceptionally for a dation capacities, harmonization of the pricing policy lower level in simple hostel in the secondary and remote on the single market and improving numerous other locations); Standard level (a common and expected qu- socio-economic and social characteristics. ality of the hostel which is true for most objects); Higher Positioned power of hostel: By longtime representa- degree (Hostels beloning to this category are positioned tion on the wider tourism markets, hostels provided a at the most important locations, destinations and routes significant role in the market organized hotel accommo- without the exception to the comprehensive organized dation, achieving significant economic and other busine- promotion of the largest number and selection of the ss effects. The character of the hostel is measured with a best service capacity). special role in improving the social relationships among In domestic terms of accommodation and tourism young people worldwide, as well as an additional mode practice, the concept, types and functions of the hostel of education, or entertainment and achievement of signi- are not conceptually, clearly defined and determined, ficant financial effects which is why the existing institutional framework is According to the available data for the year 1970, the often not sufficient to comply with the minimum stan- Youth Hostel Association of Serbia (FHSS), which is a dard for successful implementation and development member of the International Youth Hostel Federation, of this type of characteristic accommodation facilities the international association “Hostelling International on the open market. Leisure facilities are designed un- Association” (HI), included about 3,500 hostels in aro- der-prescribed standards and common behavior often und 80 countries. Voluntary membership of 3,694 ho- cannot be characterized as clearly and firmly established stels was recorded in 2011, or 4009 hostels in 71 countri- 1 http://serbia-hostels.org 244 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS rules of behavior in the workplace or prescribed stan- tourism destination or options for the construction and dard, so it can sometimes cause undesirable conduct and renovation of existing facilities. It is estimated that the lack of understanding of the key actors in this kind of average number of beds per local facilities is about 21, accommodation services.2 but it should be noted that there is a significant number The hostel industry in Serbia: This hostel industry of bunk beds, which significantly increases the estimate (hosteling) as a characteristic of the target profiled lodg- of the total number of beds in relation to the estimated ing, occupied and / or can occupy a significant segment total number of beds. It can be concluded that local hos- of the tourism market order accommodation facilities, tel accommodation has a total of about 3,675 beds, of site development schedule and clearly defined approach- which 1,953 in Belgrade, which accounts for about 53% es towards the target groups. According to the current of the total capacity of beds in hostels. schedule and location capabilities, of simply launch and significant development in relation to the hotel facili- Beds / Members Numbers of Location: % ties of lower categories, hostels wish their development rooms of objects beds capacities to be suspended “a competitive” but concep- 1. Belgrade 21 93 1.953 53 % tually important synergic-storage capacity, which contributes to the overall improvement, market supply and 2. Serbia 21 82 1.722 47 % forces the tourism market organized accommodation, Total: 175 3.675 100 % as well as the provision of related software and special services to guests. In relation to the total registered (categorized) hotel On the basis of comprehensive records of the Youth accommodation, hostels record around 12.5%, which is Hostel Association and Serbian Business Association of unsatisfactory participation and indicates and confirms Hotel and Catering Industry HORES in 2013, Serbia had the unique problem of total occupancy of accommo- about 100 registered hostels, and about 87 in Belgrade. dation capacities in the domestic tourism market. The Major expansion started around 2004, and especially af- problem of insufficient availability of accommodation ter 2009, when about 10 to 20 hostels were opened per capacities in local industries also expressed oscillating year, but is constantly recording a significant number trends, and thus deepens the problem of occupancy of closures due to irregular registration which is hard to of comprehensive national capacity to accommodate determine (Kosar & Ristovski, 2013, p. 304). According guests. to official site of Youth Hostels Association of Serbia in Domestic hostel accommodation characterized the 2010, a total of about 52 hostels was recorded in Serbia, work of a range of hostels without the stable and long- 36 of which in Belgrade. It should be noted that in the early, middle and late decades of the last century, youth term business concept and therefore, classification of any tourism devoted significant attention to organization of kind of categorization. Promotion is an individual activ- children and youth major resorts that can now be seen ity of individual hostel in accordance with the personal in the significant not organized and special conditions. assessment of their own organization, quality, technical and personnel capabilities and market-presented policy In the Republic of Serbia, there is unofficially about operations, sales, price and others. Notwithstanding the 175 hostels registered, of which the largest part is in Bel- uncertain standards and disaggregated categorization, grade. This arrangement provides special opportunities specifics inherent to each individual hostel determine and development possibilities in the interior, especially the position of each hostel and hostelling activities in where a schedule of hotel accommodation is inadequate the total domestic demand for the subject and the ca- character of the site, the possibilities of developing a pacity to accommodate guests. Business in the area of 2 In the elaboration of research themes of this paper, the author organized institutional type of hotel and similar accom- in accordance with the existing system of domestic methodol- modation services in relation to the creative accommo- ogy bylaws regarding categorizing accommodation, simulate and made a complete practical normative elaboration in order dation homemade hostels determines the special role to test and prove the possibilities of creating the necessary and and importance, including the balanced linking of the applicable normative regulations for domestic categorization overall resource type and accommodation capacity of the of the hostel including: “ordinance on standards for categori- domestic tourism market. This creates a compact and zation of hospitality facilities for hostel type accommodation; ordinance on conditions and manner of conducting commer- meaningful market cohesion of local accommodation ca- cial activities and provide catering services, the classification pacities of a single tourism market. This role of the hostel of establishments and the minimum technical and sanitary- can be very successful but often place special refractive hygienic conditions for the planning and catering facilities for hostel type accommodation; and standard sorting hostel market problems and anomalies within the organization in the category.“ offers complete single market accommodation. 245 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Hostel and other types of domestic accommodation: Regarding the total number of domestic categorized Article 68 of the Law on Tourism of Serbia shall deter- properties, hotels have the largest share in terms of the mine the manner of classifying and categorizing cater- number of objects and the number of units and beds. In ing facilities for accommodation. Hotels of all kinds, the period from 2010 to 2014, the number of types of motels, tourist resorts, camps, inns, and the annex are hotel properties (including garni and apart hotels) rose the responsibility of the Ministry of Trade, Tourism and from 251 to 328, i.e. 30.7%. The increase was also accom- Telecommunications of the Republic of Serbia (MTTT, panied by units which in 2010 was 15,357 and in 2014 2015),3 while the hospitality facilities for homemade ac- 16,961, representing an increase of 10.4%, while the commodation (house, apartment, room, and rural tour- number of beds increased in this period from 24,186 to ist house hold), sorted into categories in accordance 28,501, or by 17.8% (MTTT, 2015). There is a necessity with the standards established and implemented by the of further institutional upgrading and linking of analyti- competent authorities of local governments. As regards cal monitoring and processing activities of groups and hostels as a kind of organized accommodation, there are categorized types of accommodation in order to touch no comprehensive, special and uniquely defined and laid a segment jurisdiction MTTT and local self-synchronize down minimum conditions and manner of performing the introduction of hostel categorization. The role and commercial activities, catering services, the classifica- significance of hostels can be connecting the accommo- tion of catering facilities as well as minimum technical dation market segment that establishes a special effect, and sanitary and hygienic conditions for the planning the wider business correlation and conditional, mutual and catering facilities of this kind. In this way, the home relationship with hotel accommodation 1*, 2* or even hostels are not enough, or not desired and possible way, 3* as well as the work of accommodation in the local achieve significant participation and influence on the arts and crafts. Currently, the interrelation is negative domestic market accommodation facilities in the sin- competitive in this segment of work in domestic market gle tourism market. The existing binding and referral accommodation minimum rules for the organization and operation of The attitude of hostels and other accommodation the hostel are currently contained in the work of the facilities in the domestic market: Hostels occupy the national legislation and subordinate legislation govern- market position of facilities for housing, which in many ing the operation of tourism and commercial activities, characteristics and aspects of work indicates significant as well as the overall economic activity and the mini- development and market opportunities. Improving the mum specialist regulations that directly regulate com- operation and development of hostel accommodation in merce facilities for storing, preparing and serving food a certain way can be considered competitive compared and beverages and other ancillary and supplementary to other types of graded facilities and the capacity to ac- activities performed in hostels. The average status of lo- commodate types of hotels, motels and inns and this va- cal facilities and the capacity to accommodate guests, riety of classified medium and lower quality standards. which are the methods of categorizing the jurisdiction When it comes to hostels in better locations and/ or MTTT, compared to the number of buildings, units and higher quality, with an emphasis on own target groups 4 beds, stream (2014, 2015, 2016) are as follows: of young people, recognized the market competitiveness and strength compared to similar objects in other types of organized accommodation. Hostels in relation to oth- April August May 2014 2015 2016 er facilities to accommodate up to a maximum of 3* can be very competitive and in a good part uncoordinated. 1. Registered graded facili- 350 352 362 ties for accommodation: Hostels as unclassified objects in spite of all the differences in relation to other types of accommodation of- 2. Registered graded units: 17.062 17.897 18.069 ten occupy a position of unfair competitor. The current 3. Registered categorized position of hostels within the local offer of accommoda- 28.637 30.090 29.661 beds: tion facilities is not adequate by the abilities and needs. In addition to his work next to generated effects and 3 Art. 27. “Regulations on standards for categorization of hospi- good practice examples, hostels recognized many short- tality facilities for accommodation” determining categorization other facilities by type: home, apartrmani, rooms, rural tourism comings that need to be rehabilitated and improved. households and hostels are the responsibility of local govern- Stronger institutionalization and introduction of cate- ment (Official Gazette of RS, 41/2010, 103/2010, 99/2012). gorization create the conditions for stronger conceptual 4 Determining of categorization of other facilities based on their type: houses, apartments, rooms, rural tourism households, demarcation, establishing clear business conditions as and hostels, is the responsibility of the local government. well as the full force of promotional and presentational 246 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS role that fully promote this type of accommodation but investment and organizational capacities and individual also the overall governing nomenclature and accommo- entrepreneurial spirit, realizing the effects of the busi- dation, classified by type, quality and market differentia- ness. Personal initiative is among the most important tion, sales and price policies and others. By analyzing elements for quality and successful hostel business. Op- the structure of the target groups and guests in the do- posite the successful and in all quality hostel activities, mestic tourism market, it can be concluded that hostels we can see a series of burdensome and desorganisational in many comparative parameters conditionally monitor characteristics that are considered essential and profes- the operations of hotels and other lodgings based on the sional guidance for successful work. This approach is trends and occupancy achieved and at price levels, the not sufficient for significant development of domestic results achieved, guest satisfaction and others. hosteling. Special observed deficiencies are common Hostels in the business market generate significant and under-designed promotional appearance on the direct and interactive impact compared to similar types market that support individual interests and enable the of hotel and accommodation facilities categorized ob- organization’s stronger representation and recognition jects 1 * and 2 * in special cases and to facilities for the and protection of interest and market positioning of as- accommodation of other types and up to 3 * Stepan clas- sociated hostels. sified categorization. Types of facilities and capacity of In addition to the previously indicated aspects of hotels and similar types of accommodation which are domestic hostel practices, other characteristics can be categorized directly, largely exposed or could be exposed observed: to conditional and reciprocal aspects of the mutual work ◆◆ Insufficient utilization of resources for the work of the hostel are: on the hostel „undiscovered“ locations and destinations; ◆◆ Insufficient care and support in the hostel busi- Number Number Number Number ness as separate and specific types of accommo- Type of objects of apart- of objects of rooms of beds ments dation; ◆◆ Lack of clear, unified and development of stan- 1. Garni hotel * 4 0 14 26 dards and rules of categorization; ◆◆ Insufficient training of key actors and direct per- 2. Garni hotel ** 30 21 486 830 petrators of the hostel operations; ◆◆ General institutional marginalization, particu- 3. Pansioni * do *** 3 19 59 122 larly in public spaces and unify business rules; ◆◆ Non-existent system of monitoring, evaluation 4. Hotel * 14 42 1.263 2.250 and assessment of individual hostels; ◆◆ High degree of improvisation in the work wit- 5. Hotel ** 56 125 2.139 4.047 hout supporting the operation and development of the hostel; Total: 107 207 3.961 7.275 ◆◆ Low level of professional monitoring, support, recording and analytical-statistical interpretation; 6. Garni hotel *** 38 101 800 1.497 ◆◆ Other features which are indicated in the paper or seen in the work of the hostel in the domestic 7. Hotel *** 78 393 3.975 7.298 market. Identified problems of domestic hostel industry are Total: 116 207 4.775 8.795 lack of unique technical and technological normative base which is necessary to define business methods and strategies used in the hostel industry, as follows: Characteristics and specific aspects of domestic hostel a) Previous aspects of interior decorating concep- accommodation: As regards the work of local hostels, tual demarcation for improving the organization we can say that that it is primarily the product of indi- and functioning of the hostel to the adoption of vidualy organized hostels, which in addition to its own necessary rules of conduct in the hostel business initiative, the maximum level of creativity, with personal (Petković & Mitrović, 2013, p. 429); 247 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

b) Establishment of a system of hostel categoriza- role and place of satellite accounts in the im- tion in accordance with the quality standards provement of market power of local capacities and goals for improving the market position of and domestic tourism development; hostels and other domestic accommodation ca- f) Other progressive and development activities. pacities; c) Institutionalization of rules, conditions and Conclusion standards of the local hostel activities to include in a regular resource of categorized accommo- Hostels require a clear business target model and dation facilities under the jurisdiction of MTTT cannot be developed without a stronger institutional a process of categorization entrusted to the ju- and normative framework and working conditions. Sig- risdiction of local governments (Kosar, 2011, p. nificant upgrading of the role of hostels within the total 97); offer of accommodation facilities in the tourism market d) Creating the conditions for institutional is identified with the aim to create the conditions for strengthening of care for young people through hostel standardization and quality categorization, which the development of domestic tourism hostel ac- best defines the city and market position of the hostel tivities, specifically governed by compliance with and overall youth tourism. the (HI).5 Hostels have defined a clear target business model It is necessary to implement a number of other and certainly cannot be developed without a stronger in- activities to the beneficial hostel domestic operations stitutional and normative framework and working con- among which are the following: ditions. Significant upgrading of the role of the hostel a) Adoption of necessary secondary legislation by within the total offer of accommodation facilities in the MTTT the Government of the Republic of Ser- tourism market identified in the need to create condi- bia (Kosar & Ristovski, 2013, p. 304); Ordinance tions for standardization and quality categorization of the on standards for categorization of hospitality fa- hostel, which in the best way defines the city and market cilities for hostel type of accommodation; Ordi- position of the hostel and total tourism for young users. nance on conditions and manner of conducting Development hostel activities fully support further in- commercial activities and the provision of cater- vestment and development projects in the domestic tour- ing services, classification of establishments and ism market, which can be considered innovative in terms the minimum technical and sanitary-hygienic of flexible needs and desires of youth tourism. Proper as- conditions for the planning and catering facili- sessment, implementation and supervision of conditions ties for hostel accommodation; Standard hostel for organised tourism promotion for young people and sorting into categories; taking responsibility for the establishment of institution- b) Introduction of obligatory registration of statis- ally defined and minimum work requirements of the lo- tical, analytical and other necessary monitoring cal hostels, primarily based on the minimum established of hostel accommodation with the elaboration rules, conditions and quality standards, ensuring full gen- and implementation of the system of education, eral health, safety and security, good communication and support and subsidies for the development and hospitality to young tourists. improvement of the hostel (Kosar & Ristovski, 2013 p. 307); References c) Completion of the complex realization of tourism register aimed at improving the work of the Jovanović, V. (2013). Tematski turizam. Beograd: Uni- tourism industry; verzitet Singidunum. d) Support the advancement of the association Kosar, Lj. (2013). Alternativni standardi kategorizacije HORES, the Youth Hostel Association of Serbia, u hotelijerstvu. Hotel-link, 11(21/22), 1. and other professional associations, improve- Kosar, N., & Ristovski, M. (2013). Hosteli kao nova ment of cooperation with “Hostelling Interna- razvojna šansa smeštajne ponude Srbije. Hotel- tional Association” and others; link, 11(21/22), 1. e) Networking unified communications and oper- Ministry of Trade, Tourism and Telecommunications. ating system and support the definition of the (2015). Zakon o turizmu. Retrieved August 12, 2016 5 Institutional regulation of cooperation and relations with from http://mtt.gov.rs/download/1(2)/ZAKON%20 Business association of hotel and restaurant industry - Serbia O%20TURIZMU.pdf 248 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Petković, G., & Mitrović, M. (2013). Razvoj omladinskog Vukotić, J. (2013). Na korak od evropske hotelske katego- turizma Srbije. Uticaj globalnih turističkih tokova rizacije. Hotel Life: Magazin of Hospitality Manage- na kvalitet hotelskog poslovanja/ IX Međunarodni ment, 2(2013), 24-27. naučno stručni-simpozijum Hotelska kuća 2013, World Economic Forum. (2015). Annual Report 2014-2015. Zlatibor, Novembar 2013. (str. 427-437). Retrieved August 12, 2016 from http://www3.wefo- Službeni glasnik Republike Srbije. (2012). Prvilnik o standar- rum.org/docs/WEF_Annual_Report_2014_15.pdf dima za kategorizaciju hotelskih objekata za smeštaj. Službeni glasnik RS, br. 41/2010, 103/2010 i 99/2012. UNWTO. (2015). Annual Report 2015. Retrieved August 12, 2016 from http://cf.cdn.unwto.org/sites/all/files/ pdf/annual_report_2015_lr.pdf

249 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Quality and Competitiveness in Tourism and Hospitality Industry

Hotel Performance Measurement: Literature Review

Mladen Mitrović1, Abstract: Competitive business environment with changing circumstances and numer- 2 Sandra Janković , ous stakeholders’ pressures is forcing hotels to make stronger efforts towards Gordana Ivankovič1 satisfying different customer groups. Performance measurement has become a very important tool in preparing a business strategy and it helps the hotels to determine their position on the demanding tourism market. The purpose of 1 Faculty of Tourism Studies - Turistica, this paper is to determine the development of hotel performance measurement Portorož, Slovenia practices based on the previous research and literature review. It also provides 2Faculty of Tourism and Hospitality an overview of the current research in the field of hotel accounting and seg- Management, ment reporting. The study provides insights into the problem of performance Opatija,Croatia measurement and its implementation by hotel management. Keywords: performance measurement, accounting, balanced scorecard, USALI, activity based costing.

Introduction

Due to an increasingly competitive environment, performance measurement is of vital importance. The model of performance measurement enables the management to make decisions appropriate for the hotel industry and enhanced performances of the organisation. Information needed for decision making lies in the domain of the management accounting system (MAS), which has to be appropriately developed and organized. Undoubtedly, the MAS differ substantially in the hotel industry compared to other industries. Hotel enterprises have unique characteristics of their operations, as they bring together many activities that are essential for guest satisfaction (Ivankovič & Jerman, 2011). It is well known that value is of great importance for guests and employees in the hotel industry. The choice of performance measurement is nowadays the most significant challenge in the hotel industry. Nevertheless, exaggerated performance measurement is problematic as hotels want to quantify almost everything. The present challenge is not to find out what can be measured, but what should be measured. Performance measurement helps in the implementation of the goal-oriented strategy. It is an element of value-based Correspondence: management used to determine the value of the hotel for the owners and Mladen Mitrović to meet the interests of other stakeholders. Moreover, performance meas- e-mail: urement is a critical component of human resources management, as well [email protected] as an integral part of management award and promotion. 250 Sitcon 2016 Doi: 10.15308/Sitcon-2016-250-257 submit your manuscript | www.sitcon.singidunum.ac.rs SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Strategic management accounting is focused on where measurement is the process of quantification value added for guests, market share and long-term and action leads to performance.” strategic budgets or long-term accepted strategy. Since With the growth in international travel and the- the effectiveness of a company depends on its capa- refore, increasing demand on hospitality businesses, bility to achieve the goals, its performance cannot be performance measurement in the hospitality industry left to chance, but has to be planned. For a successful has gained particular importance as a tool for effective future performance, directed business operations sho- decision-making (Haktanir, 2006). uld be performed. To that end, management has to be PM has been used in the hospitality industry for in possession of high-quality information, which is in a long time as an important component of the deci- the domain of budgeting. Continuous budgets provide sion making process. It offers hotel management the information about deviations between planned and re- possibility to make decisions that could ensure the best alized categories. (Ivankovič & Jerman, 2011) possible results, taking into account the special charac- Uyar and Bilgin (2011) state that organizations use teristics of the hotel business (Ivankovič et al, 2010). budgets for various reasons. Some of the most promi- Although there are several reasons for using the per- nent benefits of budgeting are forecasting the future, formance measures (to indicate the level of effort, to assisting in profit maximization, performance evaluati- monitor activities in units, continuous improvement, on, pricing decisions etc. All together with USALI, Ba- motivating employees etc.), overall, it is considered to lanced Scorecard, Activity Based Costing and Revenue be an integral part of the management processes, which Management in function of benchmarking, budgeting means it identifies the areas of poor performance or op- represents a comprehensive process of Performance portunities so that better plans can be developed (Hak- Measurement. tanir, 2006). Traditional performance measurement has been strongly oriented to financial performance. This ap- Hotel Performance Measurement proach has numerous weaknesses such as short-termism, lack of balance and strategic focus, customers approach, The business environment in the hotel industry is performing of competition etc. (Atkinson and Brander characterized by fierce competition and constantly chan- Brown 2001; Haktanir 2006; Atkinson, 2006; Ivankovič ging circumstances. Each hotel is in direct or indirect et al. 2010), and was strongly criticized for providing a competition with every other hotel. Strong competition limited perspective on the performance of the company. forces management to try to get closer to their guests As hotel industry is a people-oriented industry, non fi- wishes, since it is the only way to achieve success (Ivan- nancial indicators of PM are also important. They are kovič et al., 2009). Therefore, it’s no wonder that hotel valuable supplements to financial measures as they are management is more and more committed to establis- expected to supply information that would improve the hing Performance Measurement (PM) System in order financial outcome and support and monitor the strate- to show, in the best possible way, which weaknesses are gic initiatives (Haktanir, 2006). Atkinson and Brander observed in the business and where the improvement Brown (2001) emphasize the increasing recognition could be made to be able to satisfy the needs of all sta- within the hotel industry of the importance and value keholders. of people, employees as well as guests. Therefore, the PM as a tool of management accounting in the de- economic and financial success of a hotel depends on cision-making process became popular in the 1990s by the attitude and behavior of employees, development of both practitioners and academics (Haktanir, 2006; At- new products and services, as well as customer satisfac- kinson, 2006; Kaplan, 1994; Neely et al., 2000). Pnevma- tion. Hotel General and Department Managers must rec- tikoudi and Stavrinoudis (2016) notice that many aut- ognize equal importance to the goals of all stakeholders hors consider that the concept of performance is of great and not only of their shareholders. The achievement of significance for the business strategy of a company, its objectives of all stakeholders (guests, employees, strate- competitive position, and long-term economic sustai- gic partners, community etc.) can be measured by both nability. They also state that “performance and its me- financial and non-financial measures (Ivankovič et al., asurement are the key success factors for every tourism 2010). enterprise.” As stated by Bourne et al. (2003), there was There are a lot of authors who have been examining a lack of definitions about PM. In his paper, Haktanir the importance, implementation and improvement of (2006) proposed the following definition from Neely the PM process. The overview of their papers is given et al (1995):“PM is the process of quantifying actions, in Table 1. 251 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Table 1. Overview of previous research in the field of hotel Performance Measurement Original title and year Author Purpose and contribution of the paper of publication Classification of hotel The paper provides an overview of PM indicators used by researchers performance measure- Pnevmatikoudi, K., and their classification. The main purpose of the article is to provide ment indicators pre- both researchers and hotel management with better understanding of Stavrinoudis, T. sented in international the indicators, and also to have an effect on their efficient use. scientific research (2016)

This paper analyzes literature in order to provide answers on how the Hotel performance: state success of a hotel business is measured and what factors determine Sainaghi, R. of the art (2010) performances. The analysis shows the growing importance of the BSC as a satisfactory PM system.

Intangible resources in The purpose of this research was to increase the understanding and performance measure- importance of intangible resources for the hotel industry and to empha- Zigan, K., ment systems of the size the need for development and applying PM systems that include Zeglat, D. hotel this type of resources as well as the need for hotel managers to apply Industry (2010) them in their organizations.

Framework for perfor- Ivankovič, G., mance measurement The research was carried out on the sample of Slovenian hotels with Janković, S., in hospitality industry over 100 rooms. The results show that most hotels have poor economic Peršić, M. – case study Slovenia performance, which is the result of inadequately developed PM system. (2010)

In this paper, the author investigates PM practice of independent hotels in Northern Cyprus. He divides these hotels into two groups, remotely Performance measure- owned and owned managed. The findings indicate that PM in inde- Haktanir, M. ment in independent pendent hotels is influenced by various factors. For example, the degree hotels (2006) of owner’s involvement in business process restrict the flow of information and limit the involvement of managers and employees, which affects the way management operates and PM takes place.

Performance measure- This article provides an insight into PM in hospitality industry accord- ment in the internation- ing to previous literature, reviews the weaknesses of traditional PM Atkinson, H. al hospitality industry and proposes areas for future research. It emphasizes the importance (2006) of combining financial measures with non-financial measures.

The authors analyze different performance measurement system design Implementing perfor- processes published in the literature and create the framework for com- mance measurement paring the alternative approaches. There are many companies interested Bourne, M., systems: in implementation of BSC, but the attempts are usually not successful. Neely, A. a literature review The purpose of the paper is to contribute to better understanding of the (2003) factors which influence the success or failure of performance measurement initiatives by reviewing the literature.

There is a growing interest from hotel managers to change the way of measuring the business performance. Anyway, there is a difference Performance manage- between managers’ opinions on what determines their success and ment and measurement Avelini Holjevac, I., what they in fact measure, and the difference in understanding be- in the hotel industry tween managers in different functions of the importance of particular Maškarin, H. – Case study of Croatia indicators to overall success. The research was conducted on a sample (2003) of Croatian hotels and different function managers. Conceptual framework for measuring performance is provided.

The authors explore the attitudes of UK hotels using PM. They are very traditional, focused on short term, and that can lead to overlooking Rethinking performance some important issues. The impression is that hotels measure wrong Atkinson, H., measures: assessing things. Potential developments are given, and the development of a progress in UK hotels Brander Brown, J. balanced range of performance measures is one of the most important. (2001) Identification of Critical Success Factors (CSF) could also be crucial for hotels PM. Source: Author’s research 252 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

As stated, successful PM required a comprehen- manager is assigned responsibility for the items of rev- sive approach with both financial and non financial enues and costs under their control, and for deviations measures to be included. The most popular measure- between budgeted goals and actual results (Peršić et al., ment tool which covers different aspects of business is 2012). Balanced Scorecard developed by Kaplan and Norton The information needed for decision making falls (1992). It provides a multifaceted view of an organiza- within the domain of the segment reporting system, tion business performance (Atkinson & Brander Brown, which has to be appropriately developed and organized. 2001; Atkinson, 2006). BSC includes four different per- Undoubtedly, the use of the segment reporting system spectives: Customer perspective, financial perspective, in the hospitality industry differs substantially from its Internal Business perspective and Learning and Growth use in the manufacturing industry. Operations of hotel Perspective. The important feature of the scorecard is enterprises have some unique characteristics due to the the clear link between the corporate strategy and meas- various activities involved, essential for guest satisfac- ures throughout the organization. By focusing on the tion, which is reflected in a full range of manufacturing, four perspectives, managers can articulate their core vi- service and retail operations found within it. sion, strategy and goals before translating them into spe- The basic accounting system in hospitality industry cific measures, targets and initiatives (Atkinson, 2006). is Uniform System of Accounts for the Lodging Industry BSC gives hotel management information from dif- (USALI). USALI has had a long tradition since its first ferent perspectives, which is important for company’s version was established in 1926 by the Hotel Associa- business, but it has one more core function. It also mini- tion of New York City. The purpose was the attempt of mizes the potential of information overload by limiting creation and definition of one unique standard for in- the number of individual measures included (Brander ternal reporting in Hospitality Industry, according to Brown & McDonnell, 1995). According to this, Atkin- the growing interest in benchmarking between hotels. son and Brander Brown (2001) state that the selection It represented the first successful organized effort to es- of number of performance measures is a comprehensive tablish a uniform responsibility accounting system for strategic appraisal process which should lead to the clear the hotel industry and one of the first such efforts in any identification of an organization’s strategic objectives industry (Janković et al., CPA 2012). and their related key success factors, and consequently Guilding (2014) quotes the following significant should enable management to develop the appropriate benefits of using this system: and effective balance of measures. ◆◆ it represents an “off the shelf” accounting system Nowadays, companies are faced with changes in the that can be adopted by any business in the hotel business environment. Relevant sustainability and social industry, responsibility information should be prepared and dis- ◆◆ the system can be viewed as “state of the art” as closed in a statement according to the new EU financial it benefits from the accumulated experience of Directive 2014/95/EU, which has to contain nonfinan- the parties that have contributed to the system’s cial and bio-diversity information, and are responsible development over many years, for large undertakings and groups. To provide relevant ◆◆ by promoting consistent account classification information in accordance with the EU Directive as well schemes as well as consistent presentation of as the need of strategic management Sustainability Bal- performance reports, it facilitates comparison anced Scorecard method (SBSC) is used. SBSC is an up- across hotels, graded principle of BSC method and focuses on ecology, ◆◆ it represents a common point of reference for as the fifth perspective. hotels within the same hotel group. USALI represents an essential framework for the Segment reporting in hotels introduction of responsibility accounting information systems in hotels, in other words, for defining the moni- The basic idea behind responsibility accounting in- toring and reporting of all types of revenue and costs by formation systems is that each manager’s performance individual departments (Janković & Poldrugovac, 2015). should be judged by how well they manage the items It enables the evaluation of the performance of de- under their control. Segment reporting in responsibility partmental managers based on revenues and costs with- accounting personalizes the accounting information, by in their control. The departmental statements of income looking at costs and revenues from a personal control provide some of the most important internal sources of standpoint. For management in hotel enterprises, each information for hotel managers (Janković et al., 2012). 253 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Since the publication of its first edition in 1926, According to Janković et al. (2012), ABC is a meth- USALI has had 11 revised editions with the latest one odology that measures cost and performance of activi- published in 2014. With an almost 90-years long tra- ties, resources and cost objects, where resources are as- dition, it is not surprising that USALI was constantly signed to activities, then activities are assigned to cost improved and changed, in order to be more understand- objects based on their use. ABC method is also useful in able to users. The 11th revised edition, which contains calculation of customer profitability. Customers differ five sections, was analyzed by Schmidgall and DeFranco in their consumption of resources and level of profit- (2015), and they pointed out to several changes com- ability. When using ABC, firms first identify cost pools: pared to the 10th edition. Some of them are: categories of activities performed within the organiza- ◆◆ In the first section, operating statements, aimed tion (e.g. procurement). For all cost pools, cost drivers at providing information for internal users, there are identified – units in which the resource consump- are several differences. The th11 edition provides tion of the cost pools can be expressed (number of pur- two Operating Statements, one for the operators chase orders). Costs are then allocated to cost objects and one for the owners. The next is additional (e.g. products) based on the extent to which these ob- schedule “Information and Telecommunications jects require certain activities (measured in cost driver Systems” which is shown in the undistributed units) (van Raaij et al., 2003). It is concluded that ABC operating expense (UOE) section of the sum- provides better insights into customer profitability than mary operating statement. The schedule “Rentals the traditional costing systems. and Other Income” is renamed as “Miscellane- Pavlatos and Paggios (2009) list numerous benefits ous Income”. of ABC adoption in their paper. Those are: more accu- ◆◆ The second section is Financial Statements, which rate cost information for product costing, improved cost is aimed at external users (bankers, potential in- control, cost reduction, more accurate allocation of investors). The main innovation in this section is direct costs, improved insight into cost causation, iden- the Statement of Comprehensive Income which tification of activity costs, improvement of operational reflects changes in U.S. GAAP. efficiency, more accurate cost information for pricing, ◆◆ The third section Ratios and Statistics changed help in preparing of relevant budgets. The authors also its name to Financial Ratios and Operating Met- state the suggestion of Kaplan and Cooper that service rics. The recommended labor cost schedule is in- companies are ideal candidates for ABC implementa- cluded for each department, since they are the tion even more than manufacturing companies because biggest expense line item in the hotel business. most of the costs in service organizations are fixed and ◆◆ The fourth section also changed its name from direct. Expense Dictionary to Revenue and Expense In general, ABC method helps hotel managers to de- Guide. It provides more sophisticated classifica- termine which services to provide, which customers are tion by individual items, departments/schedules profitable, whether its product mix needs changing, and and accounting names. where it should direct its market focus and points out to th ◆◆ The last fifth section is completely new (10 edi- opportunities for cost reduction (Janković et al., 2012). tion has only four), and is called Gross Versus There are numerous scientific papers that cover the Net reporting. It shows the treatment of sur- topic of segment reporting in hotel industry. They are charges, service changes, and gratuities. shown in Table 2. Generally, the authors conclude that the new 11th edition is more user-friendly and provides new guidance in a number of important areas. In support of this Conclusion assertion is the fact that the entire book of the 11th revised edition is available in electronic form, which is a There is abundant theoretical and empirical litera- considerable advantage compared to previous editions. ture dealing with the topic of the Performance Measure- Although USALI provides a lot of important in- ment in hotels. Those papers provide both theoretical formation, it is still considered insufficient. For the background and practical research. The review of rel- revenue decision makers, it is important to know the evant literature provides the findings that measuring of overall cost of profit or cost centre. As USALI does not the hotel performance is a very comprehensive process. allocate the hotel overhead costs, it should be used only Some of the core components of Performance Meas- with supplementation of Activity Based Costing (ABC) urement are presented (with their latest versions) in Fig. method. 1. An important thing is that, if hotel managers want 254 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Table 2. Overview of previous research in the field of hotel Segment reporting Original title and year Author Purpose and contribution of the paper of publication

Classification of hotel The paper provides an overview of PM indicators used by researchers Pnevmatikoudi, K., performance Measure- and their classification. The main purpose of the article is to provide ment indicators pre- Stavrinoudis, T. sented in international both researchers and hotel management with better understanding of scientific research (2016) the indicators, and also to have an effect on their efficient use. Uniform System of Ac- counts for the Lodging As stated in the title, the authors analyzed the 11th edition of USALI Schmidgall, S., R., Industry, 11th Revised published in 2014. In the first part of the article, they remind of impor- DeFranco, A. edition: The New Guide- tance and evolution of USALI. The second part provides innovations lines for the Lodging and differences between the 11th and 10th edition. Industry (2015) In this paper ,the author analyzed the evolution of the USALI from the first to 10th edition (in that moment 11th edition was in prepara- Evolution of the Uniform tion). Over the years, USALI had undergone many changes in order to System of Accounts for be more understandable to management. Besides the content, USALI Schmidgall, S., R. the lodging industry (2014) was changed in terms of terminology (profit and loss statement became income statement in 5thedition, Departmental Statements of Income became Operating Statements in 10th edition etc.) The authors conduct research on Hotel GrahaCakra, in order to compare The Application of Time TDABC method with the initial cost calculation method used by the Basuki, B., Driven Activity-Based hotel. TDABC represents a new approach of measuring costs developed DwiputriRiedian- Costing in the Hospitality after the problems of ABC implementation appeared, simpler and more syaf, M. Industry: An exploratory Case Study (2014) suitable for a service company such as a hotel. In the research, they used Room Division as the main source of the hotel’s revenue as a cost object. There is a notable difference between the customers and their profitability. To keep the most profitable customers satisfied, managers must take Customer Profitability into account the relevant revenue and costs, to determine the customer Janković, S., Approach: Measurement segments that generate the greatest profit contribution. Calculating the Peršić, M., and Research Directions customer profitability is possible only with the usage of ABC method. Zanini-Gavranić, T. in the Hospitality Indus- try (2012) The empirical research was carried out in Croatian hotels and the aim was to examine the use of strategic – oriented accounting in the Croatian hotel industry. In this paper, the authors examine the usage of segment reporting Implementation of seg- standards in Croatian hospitality industry with comparation to four Peršić, M., ment reporting standards previous surveys. The results show an increasing implementation of Janković, S., in the hospitality indus- USALI methodology and a growing trend of segment reporting usage Poldurgovac, K. try – a comparative study and preparation by middle and low management, which should result (2012) in better authority and responsibility of managers to improve the overall profitability of the hospitality industry. Implementation of time-driven activity- The purpose of this research was to examine the importance of the adoption of TDABC costing system in hospitality industry and to analyze Hajiha, Z., based costing system and customer profitability different customer groups. Iranian Hotel Parsian was used for the case Safari Alishah, S. analysis in the hospitality study. The results showed that TDABC provides more accurate data on industry: evidence from cost and customer profitability than the traditional system. Iran (2011) This article provides a very comprehensive review and analysis of ac- Accounting research in counting related articles published in Cornell Hospitality Quarterly Hesford, J. W., the Cornell Quarterly: A journal. Most of the articles are descriptive, and there is a lack of ac- Potter, G review with suggestions counting research in recent years. The conclusion is that authors have for future research (2010) contributed to understanding most accounting topics, including budgeting, costing and performance measurement. In the article, the authors conduct research about practical considera- Activity-Based Costing in tions, adoption and use of ABC in hospitality industry. They also did Pavlatos, O., the Hospitality Industry: a survey of 85 Greek hotels. 20 of them reported that they had imple- Paggios, I. Evidence From Greece mented ABC system, which shows increasing adoption rate in Greece (2009) hotels in recent years. Most of the ABC non adopters (86.1%) do not intend to adopt ABC in the future. Source: Author’s research 255 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Figure 1. Components of Hotel Performance Measurement (Source: Author’s research)

to have useful information from Performance Measure- References ment to improve their business processes, all of these methods should be used integrally. Above all, budgeting Atkinson, H. (2006). Performance measurement in the process must be effective enough in order to provide international hospitality industry. In P.J. Harris the most desired effects. It has already been stated that and M. Mongiello (Eds.), Accounting and financial costing in a hotel, which is based only on partial costs management: Developments in the international and USALI method, is insufficient according to new de- hospitality industry (pp. 46-70). Amsterdam: Else- mands. Traditional costing methods are also insufficient. vier/Butterworth-Heinemann. It is recommended to complement the USALI method Atkinson, H., & Brander Brown, J. (2001). Rethinking with modern methods of costing, primarily, with activity performance measures: assessing progress in UK based costing method because this method calculates full hotels. International Journal of Contemporary Hos- costs of performance and provides the basis for man- pitality Management, 13(3),128-135. doi:10.1108/09596110110388918 aging overhead costs. Although this way of measuring performance is very effective, there are still a lot of ho- Avelini Holjevac, I., & Maškarin, H. (2003). Performance tels which haven’t implemented it, particularly the ABC management and measurement in the hotel industry: Case study of Croatia. Fifth International Confer- method. Pavlatos and Paggios (2009) indicated in their ence on Enterprise in Transition (pp. 1617-1628). paper some of the reasons based on many authors’ re- Split: Faculty of Economics search (there is considerable knowledge of the theory, Basuki, B., & Dwiputri Riediansyaf, M. (2014). The Appli- but low understanding of how ABC might be used in ho- cation of Time-Driven Activity-Based Costing tels; satisfaction with the existing cost accounting; high In the Hospitality Industry: An Exploratory Case cost of ABC implementation; lack of management inter- Study. Journal of Applied Management Accounting est; lack of adequate knowledge about ABC implementa- Research, 12(1), 27-54. tion; lack of time to access ABC suitability to their com- Bourne, M., Neely, A., Mills, J., & Platts, K. (2003). Im- pany; lack of appropriateness to the respondent’s type plementing performance measurement systems: a of business). Performance measurement has become a literature review. International Journal of Business very important tool for Revenue Management and the Performance Management, 5(1), 1-24 needed KPIs are provided from USALI. Revenue Man- Brander Brown, J., & McDonnell, B. (1995). The balanced agement is also important as a tool for the benchmarking scorecard: short-term guest or long-term resident? process, which presents hotel’s success compared to its International Journal of Contemporary Hospitality competition. Management, 7 (2/3), 7-11. Having this in mind, it is important to raise the doi:10.1108/09596119510146751 awareness of hotel managers about the benefits of us- Guilding, C. (2014). Accounting Essentials for Hospitality ing modern performance management system, which Managers. Abingdon, Oxon: Routledge. could provide them with a competitive advantage and Hajiha, Z., & Safari Alishah, S. (2011). Implementation long-term business success. of time-driven activity-based costing system and 256 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

customer profitability analysis in the hospitality in- ready for it? 3rd International Scientific Conference dustry: Evidence from Iran. Economics and Finance Tourism in Southern and Eastern Europe, Vol. 3, Review, 1(8), 57-67. pp. 295-308. Haktanir, M. (2006). Performance measurement in in- Peršić, M., & Janković, S. (2006). Menadžersko računo- dependent hotels. In P.J. Harris and M. Mongiello vodstvo hotela. Opatija: Hrvatska zajednica računo- (Eds.), Accounting and financial management: De- vođa i financijskih djelatnika. velopments in the international hospitality indus- Peršić, M., Janković, S., & Poldrugovac, K. (2012). Im- try (pp. 3-21). Amsterdam: Elsevier/Butterworth- plementation of segment reporting standards in the Heinemann. hospitality industry: A comparative study. Bienni- Hesford, J.W., & Potter, G. (2010). Accounting research al International Congress Tourism & Hospitality in the Cornell Quarterly: A review with suggestions Management 2012, Conference Proceedings (pp. for future research. Cornell Hospitality Quarterly, 30-39). 51(4), 502-512. doi:10.1177/1938965510375030 Pnevmatikoudi, K., & Stavrinoudis, T. (2016). Classifica- Ivankovič, G., Janković, S., & Peršić, M. (2010). Fra- tion of hotel performance measurement indicators mework for performance measurement in hospi- presented in international scientific research. Euro- tality industry: Case study Slovenia. Economic rese- pean Journal of Tourism Research, 12, 82-98. arch, 23(3), 12-23. doi:10.1080/1331677X.2010.11517420 Sainaghi, R. (2010). Hotel performance: state of the art. International Journal of Contemporary Hospitality Ivankovič, G., & Jerman, M. (2011). Comparative analysis Management, 22(7), 920-952. of budgeting in the Slovene hotel industry. Tourism doi:10.1108/09596111011066617 and Hospitality Management, 17(1), 91-100. Schmidgall, R.S. (2014). Evolution of the Uniform System Janković, S., Peršić , M., & Zanini-Gavranić, T. (2012). of Accounts for the Lodging Industry. The Journal Customer Profitability Approach: Measurement and of Hospitality Financial Management, 22(1),41-57. Research Directions in the Hospitality Industry. 2nd doi:10.1080/10913211.2014.912105 Advances in Hospitality and Tourism Marketing and Management Conference: Advances in Hos- Schmidgall, R.S., & DeFranco, A. (2015). Uniform System pitality and Tourism Marketing and Management of Accounts for the Lodging Industry: The New Conference Board, Corfu 2012 (pp. 43-59). Guidelines for the Lodging Industry. The Journal Janković, S., & Poldrugovac, K. (2015). Benchmarking po- of Hospitality Financial Management, 23(1), 79-89. traga za najboljom praksom u hotelijerstvu: Praćenje doi:10.1080/10913211.2015.1038196 i usporedba rezultata hrvatskih i slovenskih hotela. Uyar, A., & Bilgin, N. (2011). Budgeting practices in the Koper: ZaložbaUniverzena Primorskem. Turkish hospitality industry: An exploratory survey Neely, A., Bourne, M., & Kennerley, M. (2000). Perfor- in the Antalya region. International Journal of Hos- mance measurement system design: developing and pitality Management, 30, 398-408. doi:10.1016/j. testing a process-based approach. International ijhm.2010.07.011 Journal of Operations & Production Management, van Raaij, E.M., Vernooij, M.J.A., & van Triest, S. (2003). 20(10), 1119-1145. The implementation of customer profitability analysis: Pavlatos, O., & Paggios, I. (2009). Activity-based costing A case study. Industrial Marketing Management, in the hospitality industry: Evidence from Greece. 32(7), 573-583. Journal of Hospitality & Tourism Research, 33(4), doi:10.1016/S0019-8501(03)00006-3 511-527. doi:10.1177/1096348009344221 Zigan, K., & Zeglat, D. (2010). Intangible resources in Peršić, M., Bakija, K., & Vlašić, D. (2015). Corporate so- performance measurement systems of the hotel in- cial responsibility reporting in accordance with the dustry. Facilities, 28(13/14), 597-610. new EU legislation: Are Croatian hotel companies doi:10.1108/02632771011083667

257 Quality and Competitiveness in Tourism and Hospitality Industry SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Abstract preview

Serbia’s competitive position in the regional tourism destination market

Milivoj Todorović1, Jovan Popesku2

1Singidunum University, Ph.D Candidate, Department for Postgraduate Studies, Belgrade, Serbia 2Singidunum University, Belgrade, Serbia

Abstract: gap analysis shows that Serbia significantly falls behind the Today’s global tourism destination marketplace is all about region in 29 out of 33 indicators. The IPM analysis shows striving to attract new or repeat visitors, fulfilling their the areas in which Serbia falls behind are significant factors expectations, attracting them to talk about their positive in determining Serbia’s position in the tourism destination experiences and motivating them to expand their expecta- market. The negative outlook is particularly evident in the tions. Consequently, countries are looking for ways, tools, levels of foreign receipts and arrivals, tourism contribution practices, and marketing strategies to track and guide their to GDP, and the national brand value. activities in order to achieve the desired performance levels. The analysis shows that economic center of gravity points Tourism represents a significant source of wealth in many to the above average performance on the outskirts of the countries, while for others it is still an undeveloped oppor- region and the gap in the middle with two countries, Mac- tunity and unutilized economic resource. Serbia is located in edonia and Bosnia and Herzegovina, falling significantly the middle of the tourism bonanza with substantial growing behind. Furthermore, the analysis shows that Serbia lacks opportunities. However, there is an ongoing pressure from a comprehensive positioning strategy for creating, manag- the stakeholders to examine the Serbia’s position in the des- ing, monitoring and tracking its position in the region and tination marketplace and determine if Serbia is maximizing globally. In particular, the underperforming areas that need its competitive position in the region and globally. improvement are awareness, attractiveness, contribution to The paper analyzes a competitive position of Serbia as a GDP, value and strength of its country’s brand, reputation, destination in the regional tourism market and how it meas- sustainable practices, corruption, legal and business climate, ures up against its neighbors. The regional market includes innovation, ease of doing business, human development Serbia’s neighboring countries enhanced by Austria, Slove- and competitiveness. The overall suggestion is that Serbia nia and Greece to provide a better view of the competitive needs a more holistic approach with an integrated synergy landscape of the Southeast European region herein called mechanism to maximize the effects of its different resources “Extended Balkan”. The region has a population of 90 mil- and programs in order to improve its position in the region. lion with the economic activity of $1.1 trillion. Annually, The emphasis of this theoretical paper is on the concept the region attracts 90 million foreign visitors who spend and methodology rather than on the selection of indexes. about $70 billion. The fact that Serbia with 7% of the region’s As the Iinternet makes global data readily available, there population attracts less than 2% of visitors and revenue calls is a growing trend among academics, scholars, research- for evaluation of its competitive position and analysis of its ers and practitioners to benefit from high relevancy of the practices in the tourism destination market. global indexes. On the other hand, IPM method allows for The gap and IPM analysis is applied to the selected number flexibility in mixing and matching different indexes with of global secondary indexes to highlight the differential the specifics of a particular country. The paper caters to effects that impact Serbia’s position in different domains both practitioners and academics by contributing to the and categories, which in turn, has a profound effect on literature on destination competitiveness through the lens Serbia’s ability to attract, delight and retain visitors. The of the positioning theory.

Keywords: gap analysis, destination positioning, destination competitiveness, importance-performance map.

Correspondence: e-mail: Milivoj Todorović [email protected] 258 SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Abstract preview

Festivals as an important determinant of destination competitiveness: A case study of Serbia

Vanja Dragićević, Abstract: Festivals represent one of the fastest growing segments of tourism industry, Uglješa Stankov, and are often seen as a key driver of destination economy and important Tanja Armenski determinant of destination competitiveness. They have significant economic, socio-cultural and political effects on the local community as well as host groups. In Serbia, festivals are recognized as one of the key tourism products University of Novi Sad, and instruments to enhance Serbian tourism competitiveness. The aim of this Faculty of Sciences, research is to analyze how festivals contribute to Serbian tourism competi- Novi Sad, Serbia tiveness from the local residents’ perspective, as the local community is an important stakeholder in tourism industry and organization of festivals. The results indicate that festivals improve the position of Serbia in the international tourism market in numerous ways, as follows: enhance image and improve promotion of the destination internationally; present the destination as special and unique; they are of great importance for exploring the local culture by visitors; they provide a variety of cultural experiences for locals and visitors etc. The findings contribute to deeper understanding of residents’ attitudes towards the festivals and can be utilized by the government and festival organizers to increase the benefits generated by the festival and to improve the Correspondence: overall destination competitiveness. Vanja Dragićević

e-mail: Keywords: [email protected] festivals, destination competitiveness, Serbia, tourism.

259 SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Abstract preview

The analysis of Serbian customers satisfaction with e-services quality dimensions of lodging e-intermediaries

Nikola Mihajlović1, Jovan Popesku2

1Singidunum University, Ph.D Candidate, Departman for Postgraduate Studies, Belgrade, Serbia 2Singidunum University, Belgrade, Serbia

Abstract: satisfaction in this study was conceptually set very narrow With the constantly rising share of online accommodation within the framework of the six e-SQ dimensions. The study bookings, finding out how customers perceive the website has shown that only three out of six dimensions have impact e-service quality (e-SQ) is becoming increasingly important on customer satisfaction, comprising 63.9% of total customer in order to build strong satisfaction and create loyal custom- satisfaction: reliability, information quality, and personaliza- ers. The main goal of the study was to analyze how Serbian tion. The study refers to the perception of satisfaction with customers perceive the quality of service provided by lodg- e-service offered by lodging e-intermediaries exclusively, ing e-Intermediaries. The model used had six dimensions and therefore has limited use when it comes to other types of websites and e-intermediaries in different industries. of e-SQ (System availability/Reliability, Structure/Usability, The e-SQ dimension “information quality” has shown the Information Quality, Efficiency, Safety/Privacy, and Per- largest effect on customer satisfaction in this study. There sonalization) with a total number of 22 items for e-SQ and is a possibility that in different circumstances and/or envi- 3 additional for customer satisfaction. Correlation matrix ronment some other dimensions may show a much greater and multiple regression analysis were used to determine importance. This research has shown that the e-SQ dimen- the impact of each of 6 dimensions of e-service quality on sions have an essential role in achieving the customer satis- satisfaction of e-intermediary customers. As a convenience faction. The results also show that there is a possibility for sampling approach was used, the sample comprised mostly further improvement of lodging e-intermediary services as tourism and hospitality professionals, university staff and the customers are not fully satisfied with the most significant students. The questionnaires were distributed via e-mails, e-SQ dimensions. Also, the results and differences in the social media and partially directly in printed form during results of this and other studies show that it is necessary to the research period of 3 months (July-September, 2015). In further improve the personalization of websites and adapt total, 148 respondents participated in the research. The data them to customers from different regions and countries. gathered on the habits and e-intermediary use of Serbian Partial differences in the results of this study compared to customers show that majority of customers book accommo- other studies indicate that, due to the changing preferences dation via e-intermediaries up to 10 times a year, mostly for of customers and their perception of the quality, there is a stays of up to 6 nights. Most customers begin the process of necessity to conduct the analysis of the perception of the booking accommodation by going directly to the homepage e-SQ on a regular basis, in order to be up-to-date with the of the preferred e-intermediaries or use Google search. The ever changing needs and expectations of customers. Also, most commonly used e-intermediary is Booking.com. Dur- differences in the e-SQ dimensions that have effects on ing the selection process, the majority of Serbian customers customer satisfaction indicate that it is necessary to set up will compare multiple properties, usually even 15 and more, a broader research framework involving a greater number and will mostly book double rooms in hotels. Customer of e-SQ dimensions for further research.

Keywords: service quality, online shopping, Serbia, customer satisfaction, e-intermediaries.

Correspondence: e-mail: Nikola Mihajlović [email protected] 260 SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Abstract preview

The study of social responsibility and sustainable development in tourism organizations in Serbia

Sanja Jakovljević1, Abstract: The concept of Corporate Social Responsibility (CSR) means that tourism 2 Radmila Živković , enterprises reduce, as much as possible, their negative impact on the environment and adopt new business rules and procedures. Otherwise, the very notion has a much broader meaning. New technologies in the field of information 1Belgrade Chambre of Commerce and communication technologies, agriculture, environment, clean energy, Belgrade, Serbia health, efficient use of water resources, materials, transportation and many others, impose new social and moral responsibility of application for sustain- 2Singidunum University, able development. Such economic and social responsibility has considerable Belgrade, Serbia impact on social development, environmental protection as well as respect for human rights. The adoption of this concept, the benefits for tourism businesses are reflected in new partner relationships, increased competition, better cooperation in the internal environment through more effective dialogue with employees, ethical behavior, social security and better anticipation and change management in the environment. The primary goal of the research is to identify the degree of corporate social responsibility and sustainable development in tourism organizations in Serbia, engaged in the creation and delivery of tourism services and products. The aim determined the extent to which the concept of corporate social responsibility and sustainable development is exposed and adapted to the implementation. Research suggests that companies that have adopted the strategic CSR initiatives are more efficient than their competitors, Correspondence: because they become more effective, efficient and economical in their practice. Sanja Jakovljević Keywords: e-mail: corporate social responsibility, sustainable development, [email protected] tourism organizations.

261 SitCON 2016 QUALITY AS A BASIS FOR TOURISM DESTINATION COMPETITIVENESS

Abstract preview

Destinations of mountain tourism in XXI century: Attractiveness and competitiveness based on selected areas

Marek Żołądek Abstract: Mountain tourism is currently one of the most popular forms of tourism. New equipment technologies, increased awareness of mountain environment and Pedagogical University of Cracow, easier travel contribute to the annual increase in the number of tourists in the Department of Tourism and Regional mountain areas worldwide. This triggers the development of some mountain Research, Institute of Geography, Cracow, Poland regions as the most popular destinations among visitors, and creates competition in attractiveness between the mountain tourism centers. To enhance their competitiveness, a variety of destination development methods have been used. In three different study areas, different methods can be used to increase the tourist attractiveness of the area. The surveyed areas were Fuji in Japan, Chinese Mount Hua and the massif of Annapurna in Nepal. Except for modern forms of advertising, modernization of infrastructure and the use of ecological solutions are also used as the local solution for individual regions. As a result, each area is attractive both to domestic and foreign tourists. Currently, the rapid tourism development in mountain areas intensifies the competitiveness level between destinations. Research material was collected during the scientific expeditions in the period from 2010 to 2016 in different parts of the globe. Correspondence: GIS tools and SWOT analysis were utilized for their processing. Marek Żołądek Keywords: e-mail: mountain, tourism, ecology, environment. [email protected]

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