Impact of Globalization on Tourism Industry

Running head: GLOBALIZATION IN TOURISM INDUSTRY
GLOBALIZATION IN TOURISM INDUSTRY
Name of the Student:
Name of the University:
Author Note:

GLOBALIZATION IN TOURISM INDUSTRY1
Abstract
The aim of this essay is to discuss the effect of technological changes in the globalisation and
how the technological factors of globalisation has affected the tourism industry. Throughout
this essay, the impact of Customer Relation Management and Central Reservation System in
Hilton Hotel will be analysed so that how technologies are used in the tourism industries and
hotels can be understood. Mainly focusing this particular reputed hotel chain, the methods of
attracting and retaining new and existing customers will be discussed. Finally, the problems
of using technologies in the operations of the hotel will be discussed in detail.

GLOBALIZATION IN TOURISM INDUSTRY2
Globalization:
Globalization in these last few decades have completely changed the types and
methods of business in every sector of business. Be it a retail industry or tourism, different
factors of globalisation has brought changes in both positive and negative ways. However
according to most of the critics, globalization has feed the business by giving it an
international stage to perform. Despite the fact that there are several legal and political
barriers that create problems for the business to perform better but the companies can
effectively serve the customers of different markets across the globe (Burgoon, 2017). Due to
the spread of globalisation, the economic growth of the countries have been made possible
because the companies which had been serving the local markets only have gained the scope
to go overseas and compete with the international brands making the service and product
quality higher than past. The impact of globalisation in the business is so important that some
of the US citizens may not know where Beijing, China is located but definitely use the
Chinese products are produced in Beijing. Therefore most of the economists agree with the
fact that the globalisation has provided a net benefit for the world economic, uplifting the
standard of living of the global citizens and making the market more efficient and confident
(Gillespie, 2018).
Impact of Globalization:
Globalisation has promoted the importance of foreign direct investment in the
countries which aims to increase with the growth of the world trend. This has effectively
boosted the transfer of technology serving the global companies to grow leading the
restructuring of the industries. As mentioned before, globalisation has increased competition
among the companies in the global level that has stimulated the technological development of
the companies. This has smoothened the operations of the companies and improved economic

GLOBALIZATION IN TOURISM INDUSTRY3
output (Pascali, 2017). The globalisation therefore has supported the growth of technology
and technological development on the other hand similarly supported for the reach of
globalization. Starting from the customers to the external and internal stakeholders, the flow
of knowledge have been increased. This flow of knowledge has been controlled by
technological development that has reduced the ill effect of globalisation and maintain the
balance of business in all over the world.
Impact of technology on Globalization:
Globalisation has amplified the spread of technology in two ways. Firstly by making a
smooth way for gaining an easier access to the foreign knowledge. Secondly this has
increased the international competition that includes the result of emerging market companies
thus strengthening the incentives of the firms for innovating and adopting the foreign
technologies (Riley, 2014). This technological growth has increased the use of available
foreign technology and knowledge for boosting the innovation capacity as well as the labour
productivity growth. Knowledge actually flows from technology leaders to the ground level
heightening the innovation capacity of the firms for boosting productivity (Burgoon, 2017).
According to the International Monetary Fund, due to globalization, the domestic production
of the countries worldwide have increased 0.7 point which is a huge increment to support the
growth of the countries worldwide (Blogs.imf.org, 2019).

GLOBALIZATION IN TOURISM INDUSTRY4
Figure 1. Productivity and technology
(Source: (Blogs.imf.org, 2019)
This is the reason it can be stated that technology has contribute effectively to the
globalization where the technology leaders actually benefit from one another’s innovation. In
this respect, the growth of Korea and China to expand the technology frontier is needed to be
discussed (Zaitseva, Goncharova & Androsenko, 2016). The technological growth of these
two countries have given all the companies of these two countries to flourish and use the best
technological advancement to use and spread those in other branches of the world (Longhi &
Keeble, 2017). Thus the spread of technology is increasing. Due to popularity of such
technological developments, more companies are becoming interested in adopting this type of

GLOBALIZATION IN TOURISM INDUSTRY5
technologies. Thus a positive spill over from these new innovators to the traditional
innovators are being made possible.
Technological advancement has been related to the microprocessors, transportation
and internet which directly connect the communication system, automation process of the
production system and upliftment of the service quality. Most importantly, the
communication process has been vitalized through technological advancement fanned by
globalization which has enabled the information to the transferred effectively within a limited
time period. Through plummeting of the global communication costs the opportunities of the
companies has been increased. To Longhi and Keeble (2017) here the updated data are
collected as well as monitored in the overseas markets trends to make it easier for adaption.
Due to increased global communication, the connection among the branches of the
companies has been increased. This has eliminated the problems of managing the subsidiaries
of any global brand. In addition to this, the main branch can nullify the problem of
miscommunication or the communication gap among the stakeholders like suppliers, board
members and management along with the local employees working for the brand (Gretzel et
al., 2015).
With the effect of globalization, the spread of technology has led to increased usage
of internet among the customers in all over the world. Therefore, the customers from India
can buy Australian products even if they do not find the brands operating in his own country
(Gillespie, 2018). Through the spread of internet, the updated data can be collected which
enable the companies to understand the need of the global customers. Internet has enabled the
creation of global audience for any type of company which can let the customers get proper
access to the products or services. Due to globalization and free trade, advertisement of the
products through internet has not been restricted by geographic region anymore. Hence
customers of America can buy Levi’s jeans in Paris and McDonald’s food in Tokyo.