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Tourism Intelligence International

Reinventing Tourism


Tourism Intelligence International (TII) is a leading research and consultancy company serving travel and tourism public and private sector clients around the world. TII recognised that the travel and tourism industry is changing rapidly and radically, and that the more experienced, demanding and complex travellers are driving these changes. To assist industry players to stay ahead of the game and ahead of their customers, TII published in 2000, a number of detailed market reports on the American, British, German and Japanese travellers. These reports are regularly updated and a number of others have since been added, including the Top Ten Emerging Markets, Internet Marketing, Successful Hotels and Resorts, Impact of the Global Recession on Travel and Tourism. This report: Cities on the Rise – Competitive Strategies for City Tourism – is another in a series of travel market analyses from Tourism Intelligence International. The complete list of Reports available from Tourism Intelligence International include: Cities on the Rise – Competitive Strategies for City Tourism The World’ Top Ten Outbound Travel Markets The Paradigm Shift in Travel and Tourism – Win or Die!

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How Americans will Travel 2015 How the British will Travel 2015 How Germans will Travel 2015

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Travel & Tourism’s Top Ten Emerging Markets Everything you Need to Know about Internet Marketing

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Successful Hotels and Resorts – Lessons from the Leaders Successful Tourism Destinations – Lessons from the Leaders Sustainable Tourism Development – A Practical Guide for DecisionMakers The Impact of the Global Recession on Travel and Tourism Impact of Terrorism on World Tourism Old but not Out – How to Win and Woo the Over 50s market Executive Briefs of any Publication (each) (circa 50-100 pages) Mini Market Brief (each) (circa 10-20 pages) Individual Chapters of Any Report (each)

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Tourism Intelligence International: #8 Dove Dr, P.O. Box 6154, Pax Vale, Upper Santa Cruz, TRINIDAD, West Indies Tel: (868) 676 6165 Fax: (868) 676 6093 E-mail: apoon@tourism-intelligence.com E-mail: info@tourism-intelligence.com © 2013 Tourism Intelligence International.

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Terms of Use and Copyright Conditions The material contained in this report has been derived from statistical, trade, company and other sources, including Tourism Intelligence International estimates. All information is verified to the best of the authors’ and publisher’s ability. While every effort has been made to ensure the accuracy of the information contained in this publication, Tourism Intelligence International cannot accept liability for any data herein, any interpretation made there-from, or for any loss arising from reliance thereon. Tourism Intelligence International reserves all copyright under international copyright law. Cities on the Rise – Competitive Strategies for City Tourism may not be copied, stored, reproduced or published in any format, in whole or in part, by any means — electronic, mechanical, photocopying, recording or otherwise — or disseminated to any third party without prior written permission of Tourism Intelligence International. ISBN 978-­‐976-­‐95364-­‐7-­‐0

Published September, 2013

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About Tourism Intelligence International Who We Are

Tourism Intelligence International

How We Work

How We Can Help

For over 20 years, Tourism Intelligence International has been providing consultancy services to government and private sector clients in both established and emerging tourism destinations worldwide – from Barbados, Belize and the Bahamas in the Caribbean to Benin and Botswana in Africa; Brazil in South America; Australia, Iceland, Abu Dhabi and many more. Tourism Intelligence International enjoys a worldwide reputation for the quality of research, analysis, advice and strategic planning in the field of international travel & tourism. Tourism Intelligence International is results-oriented, not merely task-oriented. We insist that good intelligence must lead to practical advice, clever competitive strategies, innovative solutions to welldefined problems, and guidelines to put them in place. Such are the hallmarks of our service. But more than this, we strive to leave behind much of what we bring to any assignment or project: u To transfer knowledge through training; u To pass on ownership of processes, strategies, and goals. TII is equally well respected for our abilities to help clients implement innovative processes that optimise the potential of individual operations in the travel and tourism sectors.

Reinventing Tourism

Tourism Intelligence International delivers tailormade solutions to every client, to every challenge and to every opportunity. At Tourism Intelligence International, ‘one size does not fit all’. There are no ready-made remedies that are dished out to our clients. To every problem, to every client, unique solutions are found.

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s Areas of Expertise

TII has successfully undertaken assignments in the following core areas: u Strategic Marketing of Tourism Destinations u Market Research & Analysis u Niche Market Strategies and Development u Destination Marketing Plans u Design of Promotional Materials u Sustainable Tourism Policy Development and Integrated Tourism Destination Planning and Management u Tourism Marketing and Product Development u Strategic Planning, Strategy and Policy Development u Implementation of Strategies u Human Resources Development u Institutional Strengthening & Capacity Building u Private Sector Development u Quality Standards and Export-Readiness u Community-Based Tourism Development u Feasibility Analyses and Economic Impact Analyses u Programme Development, Implementation, Monitoring and Evaluation

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Market Intelligence

Tourism Intelligence International (TII) enjoys a worldwide reputation for the quality of its research, analysis, advice and strategic planning in the field of international travel and tourism. Tourism Intelligence International has also published many research publications and reports focusing on best practices and current and future trends in the travel and tourism industry. These include: ‘How Americans will Travel 2015’, ‘How Germans will Travel 2015’, ‘Travel and Tourism’s Top Ten Emerging Markets’, ‘Impact of Global Recession on Travel and Tourism’, ‘How the British will Travel 2015’, ‘Successful Tourism Destinations – Lessons from the Leaders’, ‘Success Hotel Resorts – Lessons from the Leaders’, ‘Sustainable Tourism Development – A Practical Guide for Decision Makers’. TII Research Publications

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TABLE OF CONTENTS About Tourism Intelligence International ..................................................................................  3   The Authors  .......................................................................................................................................  6   Preface  ................................................................................................................................................  8   List  of  Figures  and  Tables  .........................................................................................................  12   List  of  Acronyms  ..........................................................................................................................  13   Definition  of  Terms  .....................................................................................................................  14   1  Executive Brief  ............................................................................................................................  16   2  City Tourism – A Force to Reckon With  ..............................................................................  19   2.1   What  is  City  Tourism?  .......................................................................................................................  19   2.2   Why  is  City  Tourism  Important?  ..................................................................................................  19   2.3   City  Tourism  is  Growing  ..................................................................................................................  20   2.4   Rapid  Expansion  of  Global  Tourism  ...........................................................................................  21   2.5   City  Tourism  is  a  Powerful  Economic  Force  ...........................................................................  23   2.6   City  Tourism  Drives  Global  Tourism  Growth  .........................................................................  24   2.7   A  Resilient  Tourism  Sector  .............................................................................................................  25   2.8   City  Tourism  is  even  More  Resilient  ...........................................................................................  26   2.9   The  Radical  Transformation  of  Travel  and  Tourism  ...........................................................  28   2.10   A  New  Kind  of  City  Tourism  is  Possible  .................................................................................  29   2.11   Consumers  are  in  the  Driver’s  Seat  ..........................................................................................  30   2.12   Old  and  New  City  Travellers  ........................................................................................................  32   2.13   City  Tourism  –  A  Perfect  Match  for  the  ‘New  Traveller’  ..................................................  34   3  Cities on the Rise  ........................................................................................................................  36   3.1   The  Top  Ten  City  Tourism  Destinations  ...................................................................................  36   3.1.1   Bangkok  ..........................................................................................................................................  37   3.1.2   London  ............................................................................................................................................  38   3.1.3   Paris  .................................................................................................................................................  38   3.1.4   Singapore  .......................................................................................................................................  39   3.1.5   New  York  ........................................................................................................................................  39   3.1.6   Istanbul  ...........................................................................................................................................  40   3.1.7   Dubai  ................................................................................................................................................  40   3.1.8   Kuala  Lumpur  ..............................................................................................................................  40   3.1.9   Hong  Kong  .....................................................................................................................................  40   3.1.10   Barcelona  .......................................................................................................................................  40   3.2   City  Tourism  Drives  Overall  Destination  Competitiveness  ..............................................  41   3.3   City  Tourism  Fuels  Growth  of  a  Destination’s  Wider  Economy  .....................................  42   3.4   Why  are  European  and  Asian  Cities  in  the  lead?  ...................................................................  44   4  The New City Dwellers and the Creative Class of Travellers  ..........................................  49   4.1   Who  is  the  Creative  Class?  ..............................................................................................................  53   4.2   The  Creative  Class  and  the  3  Ts  –  Technology,  Talent,  Tolerance  .................................  65   5  The  DNA  of  a  City’s  Competitiveness  .................................................................................  67   5.1   The  Three  Ts  of  a  City’s  Competitiveness  ................................................................................  68   5.1.1   Not  all  Ts  are  Equal  ....................................................................................................................  70   5.1.2   The  Most  Important  T  of  All  ..................................................................................................  70   5.2   Measuring  the  3Ts  ..............................................................................................................................  71    

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5.2.1 Measuring  Talent  ........................................................................................................................  71   5.2.2   Measuring  Technology  .............................................................................................................  71   5.2.3   Measuring  Tolerance  ................................................................................................................  72   5.2.4   Diversity  is  Also  Key  .................................................................................................................  73   5.3   The  6Ps  of  a  City’s  Competitiveness  ...........................................................................................  74   5.4   The  3Ts  are  Driving  Competitiveness  ........................................................................................  76   5.5   Talent  Loves  Tolerance  ....................................................................................................................  78   5.6   Talent  is  IT!  ............................................................................................................................................  80   5.7   Creative  Cities  are  Attractive  to  Work  and  Live  ....................................................................  82   5.8   Creativity  Drives  the  Success  of  Top  City  Destinations  ......................................................  83   5.9   Competitive  Cities  of  the  Future  ...................................................................................................  85   6  A  Tale  of  Three  Cities  ..............................................................................................................  88   6.1   London  .....................................................................................................................................................  88   6.2   Singapore  ................................................................................................................................................  94   6.3   The  Story  of  Hamburg  ....................................................................................................................  104   7  TOLERANCE  is  the  Key  to  the  Success  of  City  Tourism  ..............................................  109   8  T  –  Talent  and  Technology  ..................................................................................................  109   8.1.1   Talent  ............................................................................................................................................  109   8.1.2   Technology  is  a  an  Important  Platform  .........................................................................  113   8.1.3   Diagonal  Integration  is  an  Important  Tool  ...................................................................  118   8.1.3.1   The  Singapore  Example  ...............................................................................................  118   8.1.3.2   Learn  from  Tokyo  ...........................................................................................................  119   9  O  –  Openness  is  Key,  Diversity  a  must  .............................................................................  120   9.1   Diversity  and  Openness  Creates  Economic  and  Social  Progress  .................................  120   9.2   Diversity  is  Key  but  Poses  Challenges  .....................................................................................  121   9.3   Managing  Diversity  and  Fostering  Greater  Openness  .....................................................  122   9.4   Amsterdam  –  A  Lesson  in  Openness  ........................................................................................  125   9.5   Is  Moscow  Getting  it  Wrong?  ......................................................................................................  127   10  

L –  Be  a  Leader  in  Innovation  ...................................................................................  129   10.1.1   Don't  be  Afraid  of  New  Ideas  ..............................................................................................  130   10.1.2   Be  First  to  the  Market  ............................................................................................................  131   10.1.3   Be  an  Innovative  Follower  ..................................................................................................  132   10.1.4   Never  Stop  Learning  ..............................................................................................................  132   10.1.5   Innovation  Requires  Rethinking  .......................................................................................  134   10.1.6   Balancing  Innovation  and  Tradition  ...............................................................................  135   10.1.7   Innovative  Placemaking  for  the  City  Destination  ......................................................  135   10.1.8   Place  Branding  ..........................................................................................................................  138   10.1.9   Innovation  and  Iconic  Buildings  –  the  Bilbao  Effect  ................................................  139  

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E –  Use  Events  to  Entice  Travellers  .........................................................................  144   11.1.1.1   Straetgic  Planning  and  Foresight  are  a  Must  ...................................................  146   11.1.1.2   Image  is  Everything  ....................................................................................................  147   11.1.1.3   Public,  Private  Sector  and  Community  Partnerships  (PPCP)  are  Key  ...  148   11.1.1.4   Use  Mini  Events  for  Sustainability  ........................................................................  149   11.1.1.5   London  Wins  Gold  with  the  Olympics  .................................................................  150  

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R –  Build  Responsible  City  Tourism  .......................................................................  151   12.1.1   The  Constraints  ........................................................................................................................  152   12.1.2   Consider  Cape  Town  ..............................................................................................................  153   12.1.4   Zero-­‐Carbon  Cities  ..................................................................................................................  157  

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12.1.4.1 Abu  Dhabi  Leading  the  Way  ....................................................................................  158   12.1.4.2   Ten  Steps  to  Zero  Carbon  Status  ...........................................................................  159   12.1.4.3   Ten  Steps  to  Creating  Networks  and  Partnerships  with  Local   Communities  .......................................................................................................................................  160   13   A  –  Attractiveness  and  Accessibility  .......................................................................  162   13.1   Attractiveness  .................................................................................................................................  162   13.2   Accesssibility  ...................................................................................................................................  162   14   N  –  Target  the  New  Emerging  Markets  ..................................................................  163   14.1   Wow  them  with  Technology  ....................................................................................................  164   14.2   Cater  to  the  Young  &  Hip  Emerging  Travellers  ................................................................  164   14.3   Vienna  Vying  for  the  New  Markets  ........................................................................................  165   15  

C –  Capture  them  with  Culture  and  Experiences  ................................................  166   15.1.1   Welcome  to  the  Experience  Economy  ............................................................................  167   15.1.1.1   The  Bangkok  Experience  ..........................................................................................  169  

16 E  –  E-­‐marketing  is  Essential  ......................................................................................  171   16.1   Mobile  is  Key  ...................................................................................................................................  174   16.1.1.1   New  York  –  the  Social  City  .......................................................................................  176  

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The Authors Dr. Auliana Poon heads Tourism Intelligence International, a leading international consulting company that provides innovative solutions for the travel and tourism industry. Auliana Poon led the team that developed the tourism policy and strategy for the new South Africa in 1996; developed strategies for trend-setting companies such as Sandals International (Jamaica) and Conservation Corporation (Africa); and developed the "tourism begins at home" programme that sparked the turn around in the Bahamas Tourism Industry in the early 1990s. Auliana Poon also led Tourism Intelligence International's technical support teams in implementing the Euro 6 million Eco-Tourism Development Programme (2003-2007) in the Commonwealth of Dominica and in St. Vincent and the Grenadines (2007-2009). In 2005, she undertook the competitive assessment of the Barbados Tourism Industry; developed the framework for the management and promotion of the Abu Dhabi Tourism Industry (2004); the Singapore Tourism Board (2003-2004); developed the Marketing and Human Resource Development Strategies for Mozambique and Malawi (2004-2006). Auliana Poon is analyst, co-author and editor of many of Tourism Intelligence International Publications including but not limited to: 'How Germans will Travel 2015', 'How the British will Travel 2015', 'How Americans will Travel 2015', 'Sustainable Tourism Development - A Practical Guide for Decision-Makers', 'Travel and Tourism's Top Ten Emerging Markets', The Paradigm Shift in Travel and Tourism. Auliana Poon is credited with: u Inventing the concepts of ‘Old Tourism’ and ‘New Tourism’ to describe the rapid and radical transformation of the travel and tourism industry. u Developing the concept of ‘Responsible Tourism’ as a fundamental premise of the South Africa tourism policy and growth strategy in the early 1990s. u Producing one of the most referenced works on travel and tourism, ‘Tourism, Technology and Competitive Strategies’ that one review claims “should certainly be on the compulsory reading list of all those seeking to advise and direct strategic plan for both old and new tourism destinations”. u Advising Abu Dhabi to 'stay different' from Dubai; to focus on its culture, heritage and traditions and to assume its role as a true capital of the Emirates, with an appropriate icon The Pearl - a pearl-like glass structure on 11 floors, out at sea, that would celebrate the life and times of its late Ruler Sheik Zayed bin Sultan Al Nahyan. Auliana Poon regularly addresses travel and tourism conferences around the world including Aruba, Barcelona, Barbados, Benin, Brazil, Denmark, Geneva, Greece, Iceland, Hong Kong, Minnesota, Norway, Sweden, Finland, Germany, London, Mozambique, Singapore, South Africa, St. Kitts and many others. An economist by training, Auliana Poon (apoon@tourism-intelligence.com) graduated with a B.A. (Hons.) and M.Sc. (Economics) from the University of the West Indies, TRINIDAD. She attended one of the leading European Schools, the Science Policy Research Unit at Sussex University (England), where she graduated with a D. Phil (Tourism & Technology). She lives in Berlin. Eric Adams graduated with First Class Honours (Mathematics and Economics) from the University of the West Indies (Trinidad). He holds a M.Sc. in Actuarial Science from the

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University of Iowa (USA) and an MBA (Finance and Investments) from George Washington University (USA). Eric Adams is a Business Consultant specialising in areas of travel, tourism and financial forecasting. He has more than 10 years of relevant commercial experience. He is a member of the Associate of the Society of Actuaries and the American Academy of Actuaries. He specialises in tourism and financial forecasting. He was a lead consultant in the development of a Tourism Marketing Plan and Tourism Human Resources Development Plan for the government of Mozambique. Adams assisted the Regional Tourism Organisation of Southern Africa (RETOSA) in building the North American market to Southern Africa. He developed sampling frames and conducted extensive market research in the USA and Canada, as well as detailed statistical analyses of actual performance in North America. The exercise culminated with a private sector mission to the USA and Canada. Eric Adams regularly prepares forecasts for the global travel and tourism industry. He prepared Tourism Intelligence International's forecasts - How Germans will Travel 2015 and How the British will Travel 2015, How the Americans will Travel 2015, How the Japanese will Travel 2007, Impact of Terrorism on World Tourism and Successful Tourism Destinations Lessons from the Leaders. Kevon Wilson graduated with Upper Second Class Honours in Management and Finance. Wilson is a Senior Analyst at Tourism Intelligence International. Prior to joining Tourism Intelligence International, Wilson spent two years in London where, apart from pursuing his studies, he worked as a manager at one of the largest UK-based restaurant chains, JD Wetherspoon. Wilson was a resource person for the EUR 5 million Eco Tourism Development Project – a multi-faceted project focusing on Marketing, Community Development, Product Development, Human Resource Development and Private Sector Development implemented by Tourism Intelligence International 2003-2006. Wilson specializes in strategic planning and master planning and has contributed to many of TII’s reports including ‘How Americans will Travel 2015’, ‘How Germans will Travel 2015’, ‘How the British will Travel 2015’, ‘Travel and Tourism’s Top Ten Emerging Markets’, ‘Impact of Global Recession on Travel and Tourism’, ‘The Paradigm Shift in Travel and Tourism’, ‘Old but not Out – How to Win and Woo the Over Fifties Market’, ‘Sustainable Tourism Development – Lessons from the Leaders’ and ‘Successful Hotel and Resort – Lessons from the Leaders’.

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Preface Cities play a critically important role in the development of whole economies, societies and destinations. The growth and dynamism of cities have a major impact on the economic growth of the country as a whole. Similarly, the growth of city tourism has a direct impact on the growth of tourism to the entire destination. In fact, city tourism grow faster than world arrival, recovers faster and is even more resilient the world tourism. City Tourism is a potent development force. This report considers the rapidly and radically changing tourism industry and argues that City Tourism is an almost perfect match to the new and more demanding travellers – the more responsible, knowledgeable, connected, time-poor, city dwellers and travellers – the Creative Class. It argues further, that it is attracting, keeping and satisfying this Creative Class is key to the long-term success and sustainability of city destinations. The report considers Richard Florida’s four important Ts of attracting the creative class – Talent, Technology, Tolerance and Territorial Assets as well as Anholt’s Six P’s of a City’s competitiveness – Presence, Place, Pre-requisites, People, Pulse and Potential. It demonstrates that while the 4 T’s provide the platform for a city’s competitiveness, the Six P’s are the manifestation of this competitiveness. Further, that not all four T’s are equal - Talent, Technology, Tolerance and Territorial Assets. The top ten cities in terms of tourist arrivals are Bangkok 15.98 million international visitors in 2013, followed by London, Paris, Singapore, New York, Istanbul, Dubai, Kuala Lumpur, Hong Kong and Barcelona. Asian and European Cities dominate the top ten cities for tourist arrivals. Their brand image, icons, culture, attractions, attractiveness, accessibility, diversity and mega events such as the Olympic Games, combine to create a melting pot of ingredients that deliver the right setting for the success of these top ten cities. However, while ALL the top cities boast of culture, history, nightlife, globally recognised brands, must-see icons and diversity, these alone do not explain the ‘DNA’ of the winning cities. This report argues that while the attributes of rich culture, history and heritage, teeming nightlife, globally recognised brands and must-see icons, are NECESSARY for a city’s success, they are not SUFFICIENT. Sufficiency requires the mastery of Talent, Technology, Tolerance and Territorial Assets. Tourism Intelligence   International   proposes   that   a   city’s   competitiveness   can   be   enhanced  by  the  strategy  that  we  have  coined  in  the  acronym,  TOLERANCE:     T  –  Foster  Talent  and  Embrace  Technology   O  –  Be  Open  to  Diversity   L  –  Lead  in  Innovation   E  –  Target  the  Emerging  Markets   R  –  Build  Responsible  City  Tourism   A  –  Grow  Attractiveness,  Assets  and  Accessibility   N  –  Create  Networks   C  –  Compete  Culture  and  Content   E  –  Adopt  E-­‐Marketing         Auliana Poon September, 2013.  

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2 City Tourism – A Force to Reckon With 2.1 What  is  City  Tourism?     City  tourism  is  defined  as  the  inflow  of  persons     to   a   city   in   which   they   do   not   reside   for   no   more   than   one   year,   for   the   purposes   of   leisure,   business   or   some   other   purpose   for   which  remuneration  does  not  take  place  within   the   confines   of   said   city,   according   to   the   United   Nations   World   Tourism   Organisation   (UNWTO).     The   year   2007   was   the   last   year   that   more   people   lived   in   rural   areas   than   in   cities.     In   fact,  more  than  half  the  global  population  lives   in   cities,   according   to   a   2012   report   from   Citi   and   the   Economist  Intelligence  Unit  (EIU).   And   in  2050,  seven  out  of  ten  persons  (70%  of  the   world’s  population)  will  live  in  a  city.     Cities   account   for   nearly   80%   of   Gross   Domestic   Product   (GDP)   and   are   expected   to   generate   the   lion’s   share   of   economic   growth   over   the   next   10-­‐12   years,   according   to   the   EIU.       Cities  are  definitely  moving  centre  stage.  There   is   a   general   recognition   that   the   21st  century   will   be   the   century   of   cities.   Both   the   commercial   and   cultural   worlds   are   increasingly   characterised   by   cities,   rather   than   countries.     Similarly,   cities   are   taking   the   limelight   in   many   tourism   destinations.     Some   of   the   top   tourism   destinations   (France,   USA,   Italy,   England,   Japan,   etc.)   are   also   characterised   by   popular   metropolises   (Paris,   New  York,  Rome,  London,  Tokyo,  etc.).         2.2 Why  is  City  Tourism  Important?     Cities   are   truly   the   ‘hubs’   of   a   tourism     destination.     They   are   the   hip   and   happening   places  that  draw  travellers  like  magnets.       In   many   of   the   major   global   tourism   destinations,   it   is   the   cities   that   drive   both   natural   and   ‘spill   over’   demand   for   other    

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City tourism  is  the  inflow   of  non-­‐resident  persons   to  a  city  for  less  than  one   year  for  the  purposes  of   leisure  or  business.         More   people   live   in   cities   than  in  rural  areas                 Cities   account   for   nearly   four-­‐fifths   of   Gross   Domestic  Product  (GDP         The   21st  century   will   be   the  century  of  cities  

Cities are   truly   the   ‘hubs’   of  a  tourism  destination       Cities   drive   both   natural   and   ‘spill   over’   demand   for  the  destination  


destinations within  the  country.     Paris   is   a   major   city   destination.     Tourist   arrivals   to   France   as   a   whole,   is   positively   related   to   the   growth   and   the   growing   popularity   of   Paris   as   a   major   tourism   destination   in   its   own   right.     This   is   particularly   the   case   of   the   ‘newness’   and   ‘must-­‐see’   character   of   Paris,   especially   for   many   of   the   emerging   markets   such   as   Brazil,   Russia,  India  and  China  (BRICs).     The   competitiveness,   sustainability   and   innovation   of   city   destinations,   is   key   to   the   competitiveness  of  the  destination  as  a  whole.     2.3 City  Tourism  is  Growing       City  tourism  is  on  the  rise.    Data  for  European   cities,  for  example,  suggests  that  city  tourism  is   growing   in   most   major   source   markets,   with   the   exception   of   Germany,   Italy   and   Spain.   Most   of   the   important   source   markets   for   European   city   tourism   recovered   from   the   economic  crisis  and  increased  their  number  of   bed   nights,   according   to   European Cities Marketing, 2011 and 2012 (See Figure 1:1).    The   US   market   comprised   the   single   most   important   source   of   international   tourists   to   European   cities   (19.6   million   in   2011),   followed  by  Germany  (17.1  million)  and  the  UK   (15.1   million).   Japan   and   the   United   Kingdom   are   two   markets   that   had   a   strong   decline   in   bed   nights   in   2009,   as   a   consequence   of   the   global   economic   crisis.     However,   they   managed   to   generate   consistent   growth   between   2010   and   2012.   China   and   Russia   showed  the  highest  year-­‐on-­‐year  growth  rates,   recording   28.5%   and   20.4%   respectively.    Germany,  Italy  and  Spain  showed   the   greatest   declines   (-­‐8.6%,   -­‐2.3%   and   -­‐0.8%   respectively).     In   2012,   European   city   tourism   has   resumed   its   growth.   According   to   a   survey   among   members   of   European   Cities   Marketing,   more   than   60%   of   the   city   tourism   professionals   within   the   network   expect   growth   of   between   1%  and  5%  in  their  city  destination  in  the  first   quarter  of  2013.    

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  Tourist  arrivals  to  France   is  positively  related  to  the   growth  and  the  growing   popularity  of  Paris               Competitiveness  of  city  =   competitiveness  of  the   destination  

City tourism  is  growing   from  most  major  source   markets,  with  the   exception  of  Germany,   Italy  and  Spain

City tourism is on the rise


Figure 2 Growth in Travel to European Cities by Main Source Markets (Millions) 2012

2011

2010

2009

17.9  16.9      15.8    

USA

Germany

14.9      13.6    

UK

12.5      12.4    

19.6

17.1 17.3  

15.1 14.5  

13.3 13.6    13.0      12.0    

Italy

11.3 11    9.6      9.0    

France

8.5 9.3    8.9      8.4    

Spain

Russia

4.2      3.2    

6.2

7.5

4.9 4.3    4.3      4.2    

Japan 2.9   2.3    1.8      1.4    

China  -­‐        

5.0    

10.0    

15.0    

20.0    

Source: European Cities Marketing, 2011 and 2012 2.4 Rapid Expansion  of  Global  Tourism   Travel and tourism is now the world’s largest industry, providing direct and indirect employment for some 260 million people worldwide. The industry contributes US $6.6 trillion in economic activity, according to the World Travel and Tourism Council, 2012.

Tourism is a remarkable economic and social phenomenon

The number of international tourists will reach 1.6 billion by year 2020, from 1,035 million in 2012, predicts the UNWTO. This expected growth

International tourist arrivals will reach 1.6 billion by 2020

22

25.0    


new patterns of travelling, living and behaving. Old city travellers are depicted by the old and stuffy businessmen in quaint suits and smoking cigars. They were hardly interested in venturing out of the hotel or boardroom and were not generally keen on experiencing what the city had to offer. A nice meal and ‘a good time’ at the hotel bar or restaurant were what they considered to be the extent of their trip. Internet access was not even a required essential for selecting and booking hotels. New city travellers, on the other hand, are younger and hipper. For them, playing and working are synonymous. They look different and they dress differently. They are loaded with gadgets. They venture out and are interested not only in learning about new cultures, but they want to be immersed in the culture. For this new breed of city dwellers and travellers, participating in and creating cultural experiences are one and the same. They are in the know and not afraid of using technology. They are connected, synced, tuned in and turned on 24 hours a day, 7 days a week. Old city travellers gravitated towards a city based on push factors. There was always some force compelling them to go – a job requirement for example or some need that required filling. New city travellers are pulled or drawn to city destinations based on the attractive qualities of that city – openness, tolerance, physical attributes, vibes, scenery, culture, etc. A comparison between old and new city travellers is provided in the Figure 12.

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From old and stuffy travellers to young, hip and connected

Working and Playing are synonomous

New Citty Travellers are connected, synced, tuned in and turned on 24 hours a day, 7 days a week


Figure 12 Old and  New  City  Travellers

Old City  Travellers  

New City  Travellers  

Old and  Stuffy  

Young and  trendy  

Living to  Work   Dichotomy  between   work  and  leisure     Low  tech  

Working to  Live  

Culture vultures  

Culture creators  

Observing

Participating

Place using  

Place making  

Push attraction  

Pull attraction  

Blurring lines  between   work  and  leisure   High  tech,  High  touch  

Source: Tourism Intelligence International, 2013 2.13 City Tourism  –  A  Perfect  Match  for  the   ‘New  Traveller’   The radical transformation that is taking place in travel and tourism, driven largely by changes in consumer behaviour and technology, calls for a new kind of tourism – a tourism that cities are perfectly placed to benefit from. In fact, there is a perfect match between the offering of cities and sophisticated, demanding, technology-savvy, traveller that are interested in culture and history, and desirous of creating and participating in memorable experiences cities have to offer. After all, city tourism is built on history, arts and culture, shopping, iconic buildings and innovations, hip vibes and happening scenes. It is the perfect match for the new traveller. See Figure 13 below.

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City tourism and the new traveller – a perfect match


In Chapter 2 that follows, TII provides a deeper analysis of the various characteristics of cities that make them attractive destinations to visit, work and live. Figure 13 The New Traveller and City Tourism – A Perfect Match

The New  Traveller  

Top City  Destinations  

Demanding and   Sophisticated   Interested  in  Culture  and   the  Arts   Hungry  for  History  and   Heritage   Young  and  trendy,  Hip  and   happening  

Modern and  sophisticated   Offering  Culture  and  the   Arts   High  history,  high  heritage   Hip  vibes  and  happening   scenes  

Technology savvy  

Hi-­‐tech and  innovation  

Tolerant

Tolerant and  open  

Highly talented  and   knowledgeable  

Attracting the  talented  and   creative  class   Great  place  to  work  and   live  

Working to  live  

Source: Tourism  Intelligence  International,  2013  

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With the exception of Germany and Russia, cities from all of the top ten tourism destinations appeared on the list of the top 20 city destinations. In addition, these cities accounted for the lion’s share of the arrivals to that destination. London accounted for more than half of the arrivals to the United Kingdom. Kuala Lumpur generated one third of arrivals to Malaysia. Istanbul alone accounted for nearly 30% of arrivals to Turkey.

Top Cities account for the Lion’s share of a destination’s arrivals

In 2012, the top twenty cities accounted for 16% or 176.55 million international arrivals. This volume of travel flows is indeed significant and cannot be ignored. See figure 16 below. Figure 16 Share of Tourism Arrivals – Top Twenty Cities vs. Rest of the World Total Top  20   Cities   16%  

Arrivals from   Rest  of  World   84%  

Source: United Nations World Tourism Organisation, 2013 MasterCard Global Destination Cities Index, 2013 Tourism Intelligence International, 2013

3.3 City  Tourism  Fuels  Growth  of  a     Destination’s  Wider  Economy       Not   only   is   city   tourism   important   for   other     satellite   destinations   within   a   country,   it   is   a   major   driver   of   growth   for   the   economy   as   a   whole.     City   tourism   is   on   the   rise   and   it   is   proving   to   be   a   major   generator   of   jobs   for   many  economies.         New   York   is   an   excellent   example   of   this   phenomenon.   New   York’s   leisure   and   hospitality  sector  drove  job  growth  throughout   the   recession,   according   to   NYC   &   Company.    

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attractive and purely magnetic. More than this, these cities celebrate and are open to diversity in all its forms. People of different races, religions, cultures, ethnicities and sexual orientation feel at home in these great cities. 3.4.5

magnetic

Events Create a Pull Effect

The Top Twenty Tourism Cities are also successful cities because they are hosts to major cultural and sporting events on a global and ‘off the beaten track’ scale – Olympics in London, Fashion Week in Paris, International Festival  of   Music   &   Dance in Bangkok, Gay Pride in Amsterdam, etc. They all have major events and a number of smaller events in the areas of culture, sports, religion, fashion and the arts. These events act like magnets to pull thousands of visitors, spectators and participants to theses great cities. The attractiveness of these cities makes them perfect locations or meetings and incentive travel.

Hosts to major cultural and sporting events on a global scale.

These characteristics or the Top Twenty Tourism Cities – brand image, city icons, city attractiveness, diversity and mega events – combine to create a melting pot of ingredients that deliver the right setting for city destination’s success. However, while ALL the top cities can boast of these attributes of culture, history, nightlife, globally-recognised brands, must-see icons and diversity, these alone do not explain the ‘DNA’ of the winning cities.

Brand image, city icons, city attractiveness, diversity and mega events are NECESSARY but not SUFFICIENT to explain the ‘DNA’ of the winning cities

While the attributes of rich culture, history and heritage, teeming nightlife, globally recognised brands and must-see icons, are NECESSARY for a city’s success, they are not SUFFICIENT.

Successful cities are attractive for the Creative Class of travellers, workers and consumers

Increasingly, successful cities are those that are attractive to live and work. They are attractive for Creative Class of travellers, workers and consumers. Who are the creative classes and why have they become key to success of city tourism destinations? Chapter Three   that   follows   will   focus   on   the   Creative  Class.  It  will   examine   what   it   takes   for   cities  to  attract  these  types  of  travellers.    

48

What makes cities attractive for the creative classes


4

The New City Dwellers and the Creative Class of Travellers

It is increasingly evident that successful tourism cities are as attractive to live and work as they are to travel and play. It is the attractiveness or the ‘happiness’ of the entire city destination that drives travel demand. It is therefore important to examine both aspects of a city’s attractiveness – for working and for holidaying. On the one hand, there is the expected array of amenities and attractions – accessibility, infrastructure, medical facilities, cost of living, job opportunities, etc. On the other hand, there are some key intangible factors that drive the demand to live, work and travel to a city destination. These intangibles include the vibe of the city, its creativity as well as the scenes and places that are unique, special and inspiring. Richard Florida’s concept of the Creative Class is a useful tool to analyse these aspects of a city’s attractiveness and ultimately, its competitiveness.

Successful tourism cities are as attractive to live and work as they are to travel and play

Florida's work – the Rise of the Creative Class – proposes that a new or emergent class, or demographic segment made up of knowledge workers, intellectuals and various types of artists, is an ascendant economic force that will drive the demand for future work and leisure. Unlocking the potential of the creative classes is key to unlocking the potential for travel, leisure and economic growth of cities and tourism destinations.

Made up of knowledge workers, intellectuals and various types of artists, the Creative Class is an ascendant economic force

Members of the creative class are talented and well educated; they consume and are dependent on the newest technology. They are city dwellers that prefer an urban atmosphere of tolerance and creativity. If a place lacks this, they are likely to move to more tolerant settings. They want to be with other creative individuals in order to get inspiration. In this way, they can be described as a global mobile workforce – the so-called ‘cosmopolitans’.

Talented and well-educated seeking tolerant environment to unleash their creativity

The Creative Class is not a class of workers among many, but in reality, it is the class that will bring any country who has them to great economic power and growth. The creative class creates outcomes in new ideas, high-tech industry and regional growth. Even though the Creative Class has been around for centuries, the U.S. was the

The Creative Class will bring any country who has them to great economic power and growth

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first large country to have this Creative Class in the information technology sector in the 1960s and 1970s. In the 1960s, it is estimated that less than five% of the U.S. population was part of the creative class. Today, the creative class represents more than one-quarter (26%) of the labour force (see Figure 22). Figure 22 The Core Professions of the Creative Class

Science Engineering   Architect  and  Design   Education   Arts   Music  &  Entertainment   Source: Richard Florida, 2006 The Creative Class has been on the rise for at least four decades. With an economic shift towards information technology (IT), research and development (R&D), the Internet (and related fields such as Social Media), the Creative Class is growing rapidly. Europe is now almost equal with America’s numbers represented in this class.

Shift towards Information Technology, R&D and the Internet drives growth of the Creative Class

The Creative Class constitutes approximately 40 million Americans and 150 million people worldwide, according to Richard Florida. The size of the creative class has increased more than 10% in the past twenty years. In short, they are shaping a new culture for the America of the 21st century.

Over one-tenth of the US population are in the Creative Class

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5 The DNA  of  a  City’s   Competitiveness     Marked by rapid growth and fast-paced development, many of the cities of today are vying to be ahead of others. Indeed, some of the most competitive cities of the past are no longer in top positions today. Consider that the leading cities of the free world were New York and London some six decades ago. Today, in terms of population size and growth, the leading cities are Tokyo (34.7 million), Guangzhou (26.4 million), Jakarta (26.0

Some of the most competitive cities of the past are no longer in top positions today

million), Shanghai (26 million) and Seoul (24.2 million) in the top five positions. New York is 10th

and London is 24th on the list of most populous cities (See Table 17). Table 17 Top Ten Megacities Around the World based on Population Rank 1 2 3 4

5 6 7 8 9 10 24

Megacity Tokyo

Population (millions) 34.7 Guangzhou 26.4 Jakarta 26.0 Shanghai 26.0 Seoul 25.6 Delhi 23.7 Mexico City 23.6 Karachi 22.3 Manila 21.9 New York City 21.6 London 13.3 Source: T. Brinkhoff: Major Agglomerations of the World, http://www.citypopulation.de, 2013 Many obvious city attributes and attractions contribute to their popularity – the Louvre in France, the Guggenheim in Bilbao, the Petronas Twin Towers of Kuala Lumpur, Burj al Arab in Dubai, etc. However, while these attractions and attributes are necessary, they are not sufficient to drive the competitiveness of cities and city tourism destinations. Cities compete with new infrastructure, new attractions, incentives for businesses, subsidies on infrastructure, etc. But what does it take to create

68

A City’s   attributes   and   attractions   are   NECESSARY   but   not   SUFFICIENT   to   drive   competitiveness


Figure 27 Determinants of the Competitiveness of Cities

  DRIVES     COMPETITIVENESS  

TALENT FACILITATES   COMPETITIVENESS   FOSTERS  A     COMPETITIVE   ENVIRONMENT  

TECHNOLGOY TOLERANCE  

Source: Tourism Intelligence International, 2013 5.2 Measuring the  3Ts   5.2.1

Measuring Talent

Florida measures  talent  based  on  his  definition     of   the   creative   class.     Measuring   the   first   T   -­‐   “Talent”,  is  based  on  calculating  the  percentage   of   the   population   with   a   bachelor’s   degree   or   higher  to  reflect  the  presence  and  concentration   of   skilled   human   capital   in   a   region.   In   addition,   relative   concentration   of   the   creative   class   in   a   region   is   measured   by   counting   the   number   of   creative  class  as  defined  by  Florida  on  the  basis   of   major   occupational   categories   such   as   scientists,   academics,   entertainers,   designers,   architects,  etc.     5.2.2 Measuring Technology

Talent is  a  measure  major   occupational  categories  such   as  scientists,  academics,   entertainers,  designers,   architects  

The second   T   -­‐   “Technology”   is   measured   by     utilising  two  indices,  the  “Innovation  Index”  and   “High-­‐Tech  Index”.    While  the  first  index  selects   a   simple   indicator   (patents   granted   per   capita)   to   reflect   the   innovative   power   of   the   population,   the   “High-­‐Tech   Index”   measures   both   the   size   and   concentration   of   a   cluster   of   technology-­‐related   industries   in   a   region   (such   as   software,   electronics,   biomedical   products  

Technology is  measured  by   innovation  and  High  tech   Indices  

72


facilitates growth and development in terms of industry, production and mechanisms. Tolerance provides the right environment to allow talent to thrive. So as Table X shows, Presence is driven by all three Ts. In addition, a city cannot score high in terms of Place, (its physical attributes and pleasantness) without talent and technology to support it. Iconic buildings, attractions such as, theme parks and museums, and other built characteristics are all driven by talent – architects, scientists, landscapers, strategists, visionaries, etc. The development of a place is also supported by technology – state of the art systems, tools and processes. Natural attributes such as scenic mountains, sprawling sandy beaches, inviting parks are necessary to make a city attractive but they are not sufficient. The cases of London and Paris demonstrate that man-made elements, such as the Buckingham Palace or the Louvre, act as magnets to draw visitors to the destination.

Physical attributes of a city cannot develop without talent and technology

Natural attributes are necessary but not sufficient

The point being made here is that talent, technology and tolerance are the core driving factors that determine a city’s success. Once the 3Ts are present cities will score well in terms of the 6Ps. See Figure 29 below. Figure 29 Talent, Technology and Tolerance are Driving City Competitiveness

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Talent, Technology   (architects,  visionaries,   state  of  the  art  systems,   etc.)  

Presence –  the  City’s   international  status  and   image  

Talent, Technology,   Tolerance  

Components of  a   City’s   Competitiveness   (The  End  Result)   The  6Ps  

Factors Driving  a   City’s   Competitiveness     The  3Ts  

Place –  Physical   attractiveness  of  the   city  (innovations,  iconic   buildings,  landscape)  


provides the   conditions   for   Talent   to   flourish.     Viewed   in   this   way,   it   can   be   seen   that   technology   is   Not   the   panacea,   nor   in   large   investments   in   mega   projects.     It   is   the   Talent   that   needs   to   be   invested   in   and   attracted   as   well   as   the   environment   of   tolerance   and   diversity   that   provides   the   conditions   for   the   talent  to  flourish.         Figure Flow of People to Creative Cities (Percentage Growth from 1990) Growth  of  Top  Ten  Creative  Cities  

Growth of  Bottom  Ten  Creative  Cities  

45% 40%   35%  

24%

30% 25%   20%  

14%

15% 10%   5%   0%   2000  

2001

2002

2003

2004

2005

2006

Source: US Census Bureau, 2009 Rise of the Creative Class, Richard Florida, 2002 The Big Shift, Deloitte, 2009 5.8 Creativity Drives  the  Success  of  Top   City  Destinations   Not only are creative cities attracting more people to live and work, but they are also attracting more tourists. Based on Florida’s Creative Index of talent, technology and tolerance, the creative rankings of top city tourism destinations were analysed. The analysis shows that the top city tourism destinations scored relatively high in terms of creativity. With the exception of Istanbul, all of the top destinations listed scored over 70 points out of 100. Indeed, seven of the top cities scored over 80 points. London, Paris, Singapore and New York (in the top five city destinations) scored over 80 points in terms of the creativity index. These scores show that these cities are attractive to the creative class and that this is a factor that is no  

84

2007

2008


6 A Tale  of  Three  Cities     6.1 London     London   has   risen   to   one   of   the   leading   city   destinations   in   the   world   by   attracting   visitors   from   overseas,   who   spend   high   amounts   of   money   and   sustain   a   growing   number   of   jobs   in   the   city.   London   is   the   second   city   in   terms   of   overseas   visitor   rankings,   according   to   MasterCard Global Destination Cities Index.   London   is   also   the   top   city   tourism   destination   in   Europe,   with   over   two   million   more   overseas   arrivals  than  its  closest  European  arrival,  Paris.     There  were  15.38m  overseas  visits  to  London  in   the  year  ending  September,  2012  or  7.6%  more   than   the   same   period   of   the   previous   year.     Visitors   to   London   spent   £9.2bn   (US   $14.5),   a   nine%   increase   over   the   same   period   –   September  2011.     6.1.1 The Lure of Culture   Visitors   and   tourists   flock   to   London   for   the   city’s   cultural   attractions   and   sights.   Indeed,   London  is  a  melting  pot  of  culture  and  heritage   that   is   second   to   none   and   is   even   widely   believed   to   be   the   culture   capital   of   the   world,   a   title   that   is   disputed   by   a   number   of   other   cities   internationally.     The   city   is   particularly   renowned   for   its   theatre   quarter,   and   its West   End theatre   district,   the   strand   of   mainstream   professional   theatre.   London   is   also   home   to   notable   cultural   attractions   such   as   the British   Museum,   the Tate   Galleries,   the National   Gallery,  the Notting  Hill  Carnival and the  O2.    In   fact,   three   of   London’s   museums   are   in   the   top   10   most   visited   museums   worldwide:   the   British   Museum   (5.85   million   visitors,   2012),   the   Tate   Modern   and   the   National   Museum   (5   million  each,  2012).     Apart  from  main  cultural  attractions,  London  is   also   host   to   some   of   the   most   popular   cultural   festivals   and   events   in   the   world.     London   is   home  to  several  festivals  and  carnivals  many  of   which  are  free.  The  most  famous  cultural  event   is   the   Notting   Hill   Carnival,   the   world's   second   largest   carnival,   after   Rio   de   Janeiro’s.   The   carnival   takes   place   over   the   August   bank    

89

    London  is  the  top  city   tourism  destination  in   Europe  and  second  globally  

London is  a  melting  pot  of   culture  and  heritage  that  is   second  to  none  

London is  also  host  to  some   of  the  most  popular  cultural   festivals  and  events  in  the   world  


people who constitute the creative class. Members of the creative class, according to Florida, do not necessarily gravitate to big-ticket items such as high-rise buildings and colossal centres of culture. They are rather more attracted to small sidewalk cafes, street scenes and happening vibes that are organically derived from the inhabitants of a city. 6.4.4 Variety is the Spice of the City Diversity was a key component that was missing from the Hamburg City of Talent strategy. A similar mistake made by Singapore. Like Singapore, Hamburg tried to get rid of the old and replace it with sterile steel and concrete structures. Getting rid of the old to make way for the new; replacing the grit with glitter; evicting the grass roots creative residents (the heart and soul of the city) to make way for concrete and steel was not necessarily the most appropriate approach. Instead, the members of the creative class prefer a mix of experiences. They stay at a luxury hotel but eat at a sidewalk Bratwurst vendor. They prefer the small and quaint to big and bold. They may even venture to the dismal, backwater areas of a city to spot a great find such as an unheard-of jazz club or a specialty local restaurant, while returning to the safe confines of their downtown hotel or home in the suburbs. This is one of the secrets of success of Bangkok that managed to create a perfect blending of the old and new parts of the city. The mixture of old and new, sacred and profane and grit and glitter add to the diversity and variety of a city, which acts as a haven for creative people. The initial attempts of Hamburg to become the City of Talent were a parody of what true development of creative economies is supposed to look like. Figure x below portrays a comparison of the dos and don’ts of building creative cities based on the lessons learnt from the story of Hamburg.

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Diversity is Key

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