In their Economies of signs and space book, Scott Lash and John Urry state that the progressive diffusion of tourism could not be understood from a technologic determinism. The consolidation of travel in the XIX century did not start with the extension of railroads, but with the moment these began to become a part of a social organization linked to tourism. That is, without tours organizers, the train wouldn’t have caused bigger impact.

This is related to the Innovation in world class aviation and globalization note (spanish) published in Globalizacion, a blog that belongs to the Economy of Globalization course -doesn’t say which college they belong to. The bottom line is: the current succes of low cost airlines are not caused by technologic innovations, but to modifications of certain social processes, that allow low-cost airlines to create a new market. Among the changes that enabled the drop in costs and fares are the disregulation of the market -and of the working conditions of many of the companies employees-; the online ticket system, which lowers the costs of emission and eliminates most part of intermediation; the possibility to make aggresive internet offers on low occupation periods; to adjust the values according to the emission date -and sell, for instance, the first tickets at cheaper prices, to ensure a reasonable rate of flight occupation; the revision of processes linked to the food service, to lower the expense per passenger -and in case of short flights, the selling of lunches or dinners and the elimination of free service.

As you can see, in this enumeration there are no bigger technological progress, rather, there are innovations in the management of processes. This allows the airlines to satisfy a new market, linked to those travellers who want to cheaper fares and are willing to resign confort and services.

More about the topic: Creating New Travellers at Innovation and Technology Transfer.

Bibliography

Scott Lash y John Urry (1998) Economías de signos y espacios. Sobre el capitalismo de la posorganización. Buenos Aires, Amorrortu.

Through El Sur I discovered a column by Andres Oppenheimer about tourism in Latin America, published by The Miami Herald (it requires free registration or Bugmenot, of course). Oppenheimer states that despite its growth, Latin America still concentrates a small fraction of the world’s market and it’s growing slower than in Asia Pacific and the Middle West. One of the reasons he points out is the “overregulationâ€? of airlines, which makes tickets expensive in the region. Add to this the lack of marketing policies to promote tourism in the area and the famous insecurity. I’m afraid Oppenheimer’s analysis it’s quite incomplete. It’s not only about visitors; it’s about the fraction of the total income that our countries receive on internation tourism. This phenomenon is known as leakage, and I wrote about it some time ago in this blog.

Nobody doubts that airlines’ high rates and the lack of policies about tourism have a negative impact on the movement of tourism in Latin America. But the factor that causes the biggest impact on our countries, when speaking about tourism, is the poor development of the local market, which is not a result of “overregulationâ€? issues or anything like it. It’s, simply, a consequence of the lack of better economic incomes of the people who live in this part of the world. Without a strong local market, without a strong local consumption of local touristic offers, we’ll remain in this problem for a very long time. In any case, if we’re basing all of the market’s development on foreign tourism, then we’ll have to count on policies aimed at making the foreigner spend as much as possible, as has been the case, for a long time now, in Cuzco.

Version en español

Online Travel review comments about Continental airlines launching a press gazette where they say they’re still giving on board food service without extra charge.
It really is interesting to see how things have changed, particularly with the entry of airlines that offer lower airfares. Precisely, to lower their costs, they’ve begun to charge for food and have become more strict with the topic of luggage weight. This way, they can sell cheaper tickets and get funds from selling other services or from charging fines.

As Online Travel Review says, ten years ago few people would have imagined an airline would come up with an announcement claiming they still offer free on board meals… Times and the market, of course, change.

Spanish Version Here

I was reading a note at Online Travel Review about the american airline Northwest’s decision to charge US$ 50 to every employee who wants to participate in the company’s travel program, which used to be a free benefit. Add US$ 50 for every additional member of the employee’s family. While, as Online Travel Review remarks, it’s still a great deal for the airline’s employees, it’s clear how the benefits are increasingly being cut down for companies employees and their families. I don’t know what’s going on with other companies but the pressure to sell the tickets out as well as the stronger competition has pushed companies to find ways to sell the tickets out before departure, which reduces the chances to get a seat for all those who have “stand by tickets”. If you have further information, feel free to leave your comments here.

The growth of the number of low cost airlines and the growing pressure to lower airfare costs is provoking a quite annoying effect on many passengers: the companies are seeking profits from almost any service. Some airlines have begun to charge for services as food. And weight limits are increasingly becoming more and more strict. That is: if we surpass the maximum allowed of luggage weight or the established number of bags, we have to pay pretty high fines. This is a whole change in airline’s behavior, which used to charge higher fares but used to be way less strict when considering the weight limits per passenger. About this, there’s an interesting note in The New York Times (requires free registration). The topic is reaching to a point that one of the enterviewed persons jokingly says that soon we’ll have to wear one of those 20 pockets fishing jackets, so that we can carry a certain number of things. The note is worth reading since it shows how business models are changing in the tourism market.

Every time people talk more about the advantages of wireless connections through WiFi, and the uses to make employees and executives of a company be connected the whole time with their office work. But as you can see in this note of Finanzas.com, the use of wireless nets help firms look for a raise in their workers productivity, particularly the highest paid ones. And when broad band connections start operating in airplanes, as in Lufthansa soon, things will get even more interesting.