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Sustainable Development and Tourism Destination Management of Hot Springs Hotels in Taiwan

Research Paper | What destination competitiveness should a hot springs hotel in Taiwan have for sustainable development? | | | | Submitted by: Chun-Hung, Yu (John) Student No. : 10137238 Submitted Date: Week12 (18/10/2010) Lecturer: Dr Julie Nyanjom Unit Code: Hospitality Enterprise MBA 5701 Monday: 13:30~16:30 | | | Abstract: Recently, more and more hot springs hotels in Taiwan have been built around attractions in order to take advantage of the business opportunity derived from attractions.

Nevertheless, under a highly competitive environment, retaining competitive advantages and further developing sustainably is an essential but challenging lesson for hot springs hotels. This paper seeks to find out what the most considerable competitiveness a Taiwanese hot springs hotel should own so as to achieve the aim of sustainable development. Moreover, the concepts of the hot springs tourism in Taiwan, destination competitiveness, tourist satisfaction and sustainable development are discussed in the article.

The research method used here is a comprehensive analysis with the secondary data sourced from a variety of research papers about destination competitiveness. In this paper, all study factors for sustainable development are derived from three aspects, which are tourism destination resources and attractions, tourist destination environments and tourist destination strategies. The result is expected to find out not only the significance of destination competitiveness for the hot springs tourism sector but also the determinants that are able to benefit the sustainable development.

Overall, the safety and security of hot springs bathing is the most considerable issue for both hotels and customers. Additionally, the government should set effective policies and plans to manage the development of hot springs resources so as to assist the hot springs industry to have an environmental friendly operation and sustainable development. In sum, in order to validate the practicability of the research framework, it is better to do further research with a variety of perspectives, including other Asian countries, such as Japan and China.

Keywords: Destination competitiveness, hot springs hotel, Taiwan, sustainable development Paper type: Conceptual paper Table of Contents 1. 0Introduction3 2. 0Literature Review5 2. 1Hot springs tourism in Taiwan5 2. 2Destination competitiveness6 2. 3Tourist satisfaction8 2. 4Sustainable development10 3. 0Research Methodology10 4. 0Findings and Discussions12 4. 1Tourism destination resources and attractions12 4. 2Tourism destination environments14 4. 3Tourism destination strategies15 5. 0Conclusion and Recommendations17 6. 0References19 1. 0Introduction

With the development of technology and globalisation, the ease of traveling has stimulated the prosperity of tourism and hospitality Industry worldwide, therefore, tourism Industry has become the largest Industry all over the world (Welford & Ytterhus, 2004). According to the World Tourism Organisation, the major source of foreign exchange and national income is tourism industry (Wu, Hsiao, & Tsai, 2008). Furthermore, tourism has recently made a significant contribution to Gross Domestic Product (GDP) and formed as a dominant indicator of economy in a big number of countries in the world (Lee & Chen, 2010).

For Taiwan, which is a small island located in Asia, tourism is also the main Industry and essential source of nationwide income because of its abundant cultural heritage and natural resources. From 1997 to 2003, Taiwan’s tourism was negatively affected by several crucial events, such as the Asia Financial Crisis, Taiwan’s 921 earthquakes, the 911 terrorist acts and the SARS epidemic (Yang & Lu, 2006). Nevertheless, the governmental proposals which are “Tourist Double-up Strategy” in 2002 and “Doubling Tourist Arrivals Plan” in 2008 have considerably benefited tourism Industry (Cheng, Chen, & Liu, 2009; Lee & Chen, 2010).

According to the statistics published by Taiwan Tourism Bureau, the number of tourists increased to 3,519,827 with the income of $US 5,214 million between 2002 and 2006, and the tourism tide has remained in a good situation (Cheng et al. , 2009). Among natural resources, hot springs is one of the most significant one and important tourism activity for both domestic and international tourists in Taiwan’s tourism (Lee & Chen, 2006). Two basic explanations of hot springs defined by Pentecost, Jones, and Renaut (2003) are “springs with above 98°F / 36. 7°C“and “water with a considerably higher temperature than the surrounding ground”.

Hot springs has become a critical attraction in Taiwan. As a result, there are changes happen on lodging Industry due to the appearance of hot springs hotels and resorts. In this kind of accommodation, the baths are the heart of the business. In terms of the groups of consumers, the baths usually can be divided into three types, which are the communal one, only for men or only for women (Lee & Chen, 2006). The reason why hot springs has become more and more popular around the world is because it is regarded as a perfect way to let people enjoy relaxation and recharge their mind and body naturally (Pentecost et al. 2003). Moreover, the traditional and modern treatments (spa) are also offered separately or in a combination with baths. Since the popularity of hot springs is the primary motivation for tourists, numerous hot springs hotels spring up to make use of the business opportunity. However, the majority of hot springs hotels also face an enormous pressure due to the competitive environment. For some hotels, the business just lasts for a short period and then goes bankrupt at the end. Therefore, the issue of destination competitiveness has een extremely significant for not only lodging Industry but the whole tourism industry (Lee & King, 2009). In brief, a hotel which has adequate destination competitiveness that could be converted into core competence and sustainable advantages has high likelihood of developing sustainably (Welford & Ytterhus, 2004). At the present, there are few papers in relation to hot springs tourism Industry in Taiwan and the destination competitiveness of hot springs hotels, therefore, the limit of source of information is a challenge to study the subjects associated with this industry.

In this report, the related issues, which are hot springs tourism in Taiwan, destination competitiveness, tourist satisfaction and sustainable development, will be discussed first and a better understanding of their concepts will be given as well. Afterwards, in order to know what destination competitiveness are the most influential for the growth of Taiwan’s hot springs hotels, an overall analysis with secondary data is going to be implemented. The findings from three aspects which are tourism destination environments, tourism destination resources and attractors, and tourism destination strategies will be presented and discussed fully.

Finally, the paper will conclude with presenting the main results of the report and proposing several recommendations for future research. 2. 0Literature Review 2. 1Hot springs tourism in Taiwan The reason why Taiwan is full of the hot springs resources is because of its special crustal structure. Taiwan is located in the junction of the Euro-Asian and Philippine continental plates, therefore, natural hot springs are spread around the island (Lee & Chen, 2006). In 1894, a German businessman discovered Peitou hot springs and then established the first spa( Lee & King, 2009).

This action started the earliest record of the development of hot springs on this island. Additionally, Lee and King (2009) also stated that the natural hot springs were explored and promoted by the colonial authorities and the first hot springs resort was built by Japanese in Beitou in 1896 during the period of Japanese colonisation (1895-1945). In my opinion, the customs and culture of Japanese hot springs had a huge impact on the future development of hot springs in Taiwan at that time.

Lee and King (2009) indicates that Taiwan government had begun to do large-scale promotion until 1991 and set a program called “Hot Springs Development Management Program. ” This program is set toward the improvement of the customer experience and service quality provided in a variety of hot springs areas. Besides, in order to do hot springs resources conservation for sustainable development, the government legislated “Spa Law” and established the Hot Springs Tourism Association in 2003 (Lee & King, 2009).

Apparently, the main point of these policies is to develop and retain the competitiveness for hot springs tourism in the international market. Consequently, hot springs tourism has played an important role in the entire tourism Industry, the transmission of local culture and national economy (Lee & Chen, 2006; Cheng et al. , 2009). According to Figure 1 shown in the next page, it is clearly to see that the majority of hot springs spread in the north, east and central Taiwan as a result of the geographic phenomena.

Therefore, the degree of the popularity of hot springs tourism in these areas is higher than west and south Taiwan. Figure 1 Taiwan Hot Spring Map (http://sinotour. com/tourguide/hotspring/) 2. 2 Destination competitiveness Competitiveness has been a hot issue in the tourism Industry especially after the publication of “The Competitive Advantage of Nation” written by Michael Porter in 1990 (Lee & Chen, 2010). In my opinion, competitiveness is a combination of resources, management and strategies.

Therefore, finding out and allocating valuable organisational resources, and making use of these resources with effective management and strategies are the primary tasks in every field. According to Gruescu, Nanu, and Tanasie (2009), destination competitiveness means the ability to enhance tourism expenditure and customer satisfaction in a profitable way and further implement corporate social responsibility (CSR) and preserve the natural capital for future development simultaneously.

Furthermore, destination competitiveness refers to the touristic attractiveness comprising four elements, which are historic, cultural, geographic and tourism-related attractions (Yang & Lu, 2006). However, Black (2010) represents that destination competitiveness is formed with four factors, which are core resources and attractions, supporting resources, destination management and qualifying determinants. Also, another explanation is that “destination competitiveness refers to the degree to which a country is able to attract international tourists as a source of destination under fair market conditions” (Black, 2010, p. 3). Lee and Chen (2010) define destination competitiveness as the competence of a destination to create value-added products and services and maintain the organisational resources so as to take a leading position among competitors continuously. An article indicates that destination competitiveness contains three main aspects, which are tourism destination environments, tourism destination resources and attractors, and tourism destination strategies (Lee & King, 2009).

Moreover, destination competitiveness typically could be appraised from the perspectives of tourist satisfaction and sustainable development (Lee & King, 2009). The following figure is the Sex Tourism Destination Competitiveness Model (STDC). However, I suppose that this model is also able to approximately illustrate the overall circumstance of destination competitiveness in the hot springs tourism. Figure 2 comprises four aspects and each aspect has interrelationship with other three ones.

Figure 2 Sex Tourism Destination Competitiveness Model (STDC) Industry Structure Demand Conditions Country Attributes Social Support Black (2010, Figure 1) Lee and King (2009) explains that there are numerous determinants that are crucial for hot springs hotels to be competitive and have sustainability to develop. Table 1 will give a summary of the most significant determinants in three dimensions. Table 1 Dimension| Key themes| Determinants|

Tourism Destination Environments| Social-cultural changes| The popularity of health-oriented activities | | Demand conditions| The expansion of leisure and domestic tourism market| Tourism Destination Resources and Attractions| Natural resources| Premium natural hot springs| | Safety and security| Hygienic level of hot springs and safety of overall environment| Tourism Destination Strategies| Destination planning and development| Proper design and construction of current and new hot springs regions| | Service quality management| Staff with professional abilities and interpersonal skills| | Environmental management| Effective control of the use of hot springs water| 2. 3Tourist satisfaction

Generally, in the tourism industry, tourists have expectations about the quality of products and services, and tourist attractions. Therefore, tourist satisfaction is able to measure the degree of tourists experiences and feelings (Lee & Chen, 2006). In other words, customer satisfaction can be defined as “the individual’s perception of the performance of the product or service in relation to his or her expectations” (Torres & Kline, 2006). Besides, Andriotis, Agiomirgianakis, and Mihiotis (2008) propose an idea that high tourist satisfaction absolutely can be converted into core competence or competitive advantage for a firm to deal with both internal and external challenges under a competitive environment.

Moreover, customer satisfaction could stimulate consumption because satisfied consumers will have more motivation to purchase goods or services that meet their needs mentally and physically (Meng, Tepanon, & Uysal, 2008). Briefly, a hotel which is able to satisfy as many customers as possible will have higher chance to increase profits and develop sustainably (Kandampully & Suhartanto, 2000). I deeply believe that customer experience is the heart of customer satisfaction and customer satisfaction could create customer loyalty. Huang and Chiu (2006) presents that there is a strong and closed relationship between customer satisfaction and loyalty. Loyalty means that the degree of being faithful of or a loyal feeling to someone or something (Huang & Chiu, 2006).

According to Torres & Kline (2006), customers with high loyalty have a positive image of purchased goods or services and then would like to have the behavior of repurchasing from the same person or company. Customer satisfaction and loyalty are two powerful tools for a firm not only to expand its business to a wide range but also do word-of-mouth advertisement in terms of business promotion (Kandampully & Suhartanto, 2000; Huang & Chiu, 2006). According to theories and explanations about tourist satisfaction mentioned above, I make the following figure for giving a better understanding of the procedure of customer loyalty. Figure 3 Consumers Figure 3 Customer experience

Products / Services Good image of goods or services Trust Profits Customer satisfaction Generate Customer delight Customers repurchase Competitiveness Customer loyalty 2. 4Sustainable development Recently, sustainable development has become a considerable issue for every Industry, particularly in the tourism Industry. Because tourism industry acts a main role in the economic sector in numerous countries, however, some of them pay no attention on the natural resources life cycle and the environment (Gavin, 1995). The first time mentioned about sustainable development was in the Brundtland Report in 1987(Beawuchi, Nwachukwu, & Nworuh, 2010).

In that report, the definition of sustainable development is “development that meets the need of the present generation without compromising the ability of future generations to meet their own need” (Beawuchi et al. , 2010, p. 225). Another explanation of sustainable development is the development that manages social needs without ruining life support properties so as to fulfill the satisfaction of human demands and improve the quality of human life (Staley, 2006). In order to avoid the situation of natural resources depletion, natural resources management (NRM) is proposed to achieve the aim of sustainable tourism (Beawuchi et al. , 2010).

Generally, there are several key elements of NRM, such as the efficient use of natural resources, the avoidance of overloading or devastating natural capacities, the co-existence of society and nature and so on (Beawuchi et al. , 2010). Additionally, the Rio Declaration on Environment and Development set guiding principles for tourism industry to assist sustainable development (Welford & Ytterhus, 2004). Based on the perspective of Lee and Hsueh (2010), green Industry also has positive effects on the aspects of economic profits, social welfare and sustainable development. Mochizuki and Fadeeva (2010) also say that the problem of sustainable development is able to be progressed through the education conveyed by professionals and practitioners. 3. 0Research Methodology

This paper will indicate the determinants that Taiwanese hot springs hotels are required to have for sustainable development. Furthermore, by analysing secondary data from diverse research papers, the significance of determinants with higher degree of consideration will be discussed. First of all, what is secondary data and its pattern? Besides, what advantages does secondary data have to do researches? Secondary data is the data that has been collected and analysed by other people, such as practitioners, government officials or academics (Harris, 2001; Calantone & Vickery, 2009). Harris (2001) presents that secondary data could be formed from government papers, corporate reports, public media, published academic reports and so on.

The benefits of secondary data are lower costs than primary data, providing triangulation to increase the incredibility and stimulate researchers to consider more about essential issues of the study (Harris, 2001). From the view of Calantone and Vickery (2009), secondary data has several advantages, such as less subjective than primary data, more available to researchers to apply, requires less resources (money, time and personnel), could be a guide to study relevant issues and be able to incorporate with other kinds of data to do further research and investigation. The coming table is made to briefly describe the benefits and drawbacks of primary and secondary data based on the viewpoints of Hofferth (2005), Nicoll and Beyea(1999). Table 2 | Primary data| Secondary data| Benefits| 1.

Data collection is tailored to exactly answer a research question 2. Data is collected currently from known sources 3. Collected data are reliable because of researchers’ regular controls| 1. The cost is inexpensive, even free 2. Less time on the acquisition of data 3. The analysis requires less efforts 4. Some information is merely available from secondary sources 5. Sample size can be enlarged to do thorough conclusions 6. Able to be a beneficial benchmark in studies 7. Higher accessibility due to computerisation| Drawbacks| 1. More expenses on data collection 2. Time consuming on the organisation and computerisation of data 3.

Difficulties to choose a group of sample 4. Limited sample size has negative influence on the result of research 5. The issues of data mining and dirty data| 1. The problem of data accuracy 2. Large sample sizes lead to the quantities of data| 4. 0Findings and Discussions In this part, all determinants will be grouped into three dimensions, which are tourism destination resources and attractions, tourism destination environments and tourism destination strategies. Furthermore, the determinants that are the most influential for hot springs tourism Industry in Taiwan to have sustainability will be debated. 4. 1Tourism destination resources and attractions

Three key themes, which are natural resources, transportation, and safety and security, will be discussed in this dimension. With the discovery, exploration, application and development of hot springs, hot springs resorts and hotels Industry has started to contribute and play a crucial role in Taiwan’s tourism Industry (Lee & Chen, 2006). Hot springs, which is one kind of precious natural resources, is the selling point of hot springs hotels. Therefore, I could say that high class natural hot springs is definitely a critical determinant for hot springs hotels Industry to attract both domestic and international tourists so as to make benefits and then develop sustainably.

Based on the perspective of Lee and King (2009), the level of and diverse options of hot springs are able to be important contributors to destination competitiveness. Additionally, Huybers & Bennett(2003) represent that abundant natural resources and attractions are the base of profitability and sustainability for nature-related or -based tourism destinations, for instance, hot springs hotels. The transportation infrastructure is another primary point to influence tourists to decide a tourism destination (Khadaroo & Seetanah, 2007). Generally, hot springs hotels are built around the areas where are full of natural resources and attractions.

However, these kinds of places are usually located in rural areas with lower level of development of transportation infrastructure. In my knowledge, lower accessibility is a huge problem or barrier for tourists, particularly international travelers. Because not all of them would like to rent cars or motorcycles due to the lack of time or different traffic rules. Furthermore, they probably have no idea with where car rental firms are or some of them even do not have driving licenses. According to Lee and King (2009), the convenience and ease of the access to hot springs hotels is a completely considerable determinant of the key theme of transportation.

In the dimension of tourism destination resources and attractions, safety and security can be described as the most significant determinant to determine whether a hot springs hotel has adequate competitiveness or not. The result shows that safe and sanitary bathing environment is extremely essential and considerable demand for the sustainable and competitive hot springs tourism Industry in Taiwan(Lee & King, 2009). I suppose that the importance of safety and security is as a result of three factors. Firstly, drinking sometimes is part of the entertainment in Taiwan’s hot springs hotels, however, most troubles happen after drinking because of out of control.

Secondly, like I said before, most hot springs hotel are built in rural areas, therefore, public safety is an issue and could be improved by regular police patrols. Thirdly, also most importantly, the hot springs water is needed to be controlled in high hygienic standards and high level of safe bathing environment. Actually, a safe tourism environment requires the perfect combination of social, cultural and stable political environment in an area (Nardi & Wilks, 2007). Therefore, a region where is full of the news about terrorism, accidents, Infectious diseases and political unrest mostly could not become a suitable and notable tourism destination (L. K. Richter & W. L. Richter, 1999). 4. 2Tourism destination environments

The dimension includes three main aspects, which are the growth of economy, demand conditions and social changes. Ages ago, traveling was affordable only for wealthy people, even royalties, and could be defined as a upscale leisure activity. However, with the growth of economy and the development of technology, more and more tourists go traveling for a wide-range of purposes, such as business, entertainment, study and so on (Wu et al. , 2008). I suppose that the increase of disposable incomes should be the most influential determinant of the aspect of economic growth. Because excluding the costs of housing, necessities, transportation, education, people are able to spend spare money on tourism.

Lee and King (2009) propose that the growth of competitiveness and profits in Taiwan’s hot springs sector can be positively affected by the increase of the demand of domestic tourism market. Nevertheless, in order to maximise the profitability, I think not only the demand of domestic tourism market but international tourism market should be considered as important determinants due to the vast international market. Why is demand so significant for the tourism industry? According to Black (2010, p. 36), the answer is that “Demand is the first and foremost condition for the sustainability of an industry, and domestic demand is important for any industry’s growth. ” Besides, in my opinion, demand is another form of business opportunity that could be made use of to gain profits.

Another determinant in the aspect of social changes is that the health-leisure or health-oriented activities and it has considerable effects on the improvement of destination competitiveness. Furthermore, this perspective is able to be proved by the statement: “A number of popular sun-sea-sand tourism destination have, in the last decades, attempted to diversify into health tourism in order to achieve a more balanced, sustainable approach to tourism development” (Ariwa & Syvertsen, 2010, p. 2). Apparently, that is the reason why hot springs tourism Industry has become more popular and it also shows more tourists would like to enjoy more relaxation than excitement during their trips.

I consider the trend could be explained that the age level of tourists is generally higher and they prefer the health tourism. Lee and King (2009) also indicate that the potential consumption power of young generation is the least influential element to the hot springs tourism Industry in Taiwan. 4. 3Tourism destination strategies Tourism destination strategies comprises numerous aspects, such as pricing, environmental management, destination planning, service quality management and so on. First of all, it is found that pricings might be the less useful and powerful strategy to enhance destination competitiveness in Taiwan’s hot springs Industry ( Robinson, 2003).

Because I think selling is not the main point of tourism strategy, whereas, effective management and maximising the benefits to the society and the environment are more considerable. As to human resource management, in-house trainings are necessary for both enterprises and staff because regular employee training and corporate education is able to progress the capabilities of destination marketing organisations (DMOs) (Lee & Wicks, 2010). According to Gruescu et al. (2009), with the development of information and communication technology (ICT) and the combination of ICT and the tourism Industry, training with ICT for destination marketing and promotion is an effective strategy.

In the sector of destination planning and development, Taiwan still has space to improve because the tourism Industry has not been entirely integrated with the overall Industrial development and policy also should be modified to fit the needs of the tourism Industry. (Robinson, 2003). I suppose that the government should act to support the hot springs tourism Industry, like set regulations on the use of lands and hot springs or provide financial assistance to stimulate the development. Sometimes, a country’s tourism Industry could be developed together with neighbor countries. For example, Cambodia has good relationships with Vietnam and Thailand, therefore, it is more possible for Cambodia to promote multi-countries tours (Lee & Chen, 2010). Nevertheless, Taiwan cannot do this kind of planning due to the political situation with China.

Service quality is the core of customer satisfaction, and even can be converted into a company’s competitive advantage or selling point (Robinson, 2003; Alhroot & Alalak, 2010). For me, the tourism Industry is also one part of the service Industry so service is a distinct measurement or benchmark for evaluating the overall performance. Frankly, service quality is according to the feelings of customers, therefore, sometimes it is difficult to have consensus on the level of service quality (Lee & Chen, 2006). Actually, service is directly conveyed from staff to customers and then it is clear to understand that “people” is the core of the service Industry. Gruescu et al. (2009) expresses that a good human resource management has positively influences on the quality of service.

Lee and King (2009) declares that in order to have destination competitiveness and sustainable development simultaneously, hot springs Industry should perform well on the natural resources preservation. Therefore, I think environmental management is a focus of increasing the abilities of nature-based industry or even hot springs-related Industry to develop sustainably. However, a large number of firms would like to save more costs and pay fewer efforts on environmental management (Huybers & Bennett, 2003). I have to say that environmental management should be regarded as a portion of corporate social responsibility (CSR). Additionally, I deeply believe that there is a strong relationship between sustainable development and CSR.

In sum, although the promotion of environmental management requires the expenditure of numerous resources, Taiwanese government and the practitioners of the hot springs hotels Industry still has to support it without sparing any effort for sustainable development. 5. 0Conclusion and Recommendations Possessing adequate competitiveness is the most important way to survive and develop in the dynamic and challenging environment, like the tourism environment. Therefore, it is necessary and crucial for tourism-related corporations to develop destination competitiveness and enhance the level of it so as to achieve organisational goals and the aim of sustainable development.

The research design indicates the most influential determinants from three dimensions, which are tourism destination resources and attractions, tourism destination environments and tourism destination strategies, to contribute the improvement of destination competitiveness for Taiwan’s hot springs tourism industry to develop sustainably. First of all, among all determinants, I believe tourist safety, security and sanitary is the key point to be beneficial the development and improvement of destination competitiveness in Taiwan’s hot springs sector. Afterwards, another main factor that has positive relationship with corporation competitiveness is service quality. Basically, the higher the service quality, the higher the tourist satisfaction and then the stronger the competitiveness.

Besides, environmental management is defined as a powerful tool to drive sustainable development, especially in the nature-related Industry. Lastly, other elements that have effects on the development of Taiwan’s hot springs hotels Industry are accessibility, demand conditions, natural resources and so on. Taiwan has to exert to develop the service Industry for sustainable development of economy, the increase of living quality and the solution of unemployment. The common feature of service Industry is everyone serving in this Industry should have a better understanding of human nature and customer needs. Therefore, the practitioners are required to enhance strong personalities through working experience and employee training to deal with the competitive and dynamic environment.

In the tourism environment, I think creativity and innovation are two most powerful weapons for a firm to defeat competitors and take the leading position among competition. Because creativity can generate attractiveness and satisfy the customers’ spirit, and innovation is able to make diversification and satisfy customers’ needs. Consequently, I suppose that these two elements can be described as the corporate competitiveness that is beneficial to facilitate sustainable development of hot springs hotel Industry. Finally, in terms of research, more further and future researches needed to be carried out in order to broaden the range of information relevant to hot springs tourism in Taiwan.

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