Tourism Research in an Age of Uncertainty

Anna Pollock

TTRA Canadian Chapter

Victoria, October 16th, 2008

A Personal Approach

A Fascination with Change

• Cursed by curiosity

• “ahead of her time”

• Fascinated by connections and patterns

• “where’s Copernicus when you need him?”

• Deep appreciation that we only see what we want to see. What lenses do we have on?

• What’s really happening?

• The clarity of a blank page.

Change Isn’t New‘Italy relies on external resources and the

life of the Roman people is tossed daily on the uncertainties of sea and storm’

TACITUS

but you can dress for rain………

“There are many methods for predicting the future. For example, you can read horoscopes, tea leaves, tarot cards, or crystal balls. Collectively, these methods are known as “nutty methods”.

Or you can put well-researched facts into sophisticated computer models, more commonly referred to as “a complete waste of time”.

Predicting the Future Always Problematic..

The Challenges of Forecasting

The Challenges of Forecasting“The CIA failed to warn the White House of: •the first Soviet atom bomb (1949), •the Chinese invasion of South Korea (1950), •anti-Soviet risings in East Germany (1953) and Hungary (1956), •the dispatch of Soviet missiles to Cuba (1962), •the Arab-Israeli war of 1967; and •Saddam Hussein's invasion of Kuwait in 1990.

The CIA overplayed Soviet military capacities in the 1950s, then underplayed them before overplaying them again in the 1970s.”

The Changes in My Life

Research the Past

Market Potential

Scout

Strategy

Change Agent

RESILIENCE

COURAGE

Adjusting to a new reality

Adjusting to a new reality

Rabbits & Energy

This troubled me

We’re at the fork in the road

Tourism Doesn’t Operate in Isolation!

This is Us!

How do we cross the chasm?

Purpose

• A new set of lenses

• A new set of questions

• A new set of assumptions

This Image represents RISK

• Risks associated with riding this path upwards

• Risks associated with not achieving this trajectory

• Risks associated with not having a Plan B

• Risks associated with not knowing what it really means

• Risks of being out of control

The Key Driver

INTELLECTUAL CAPITAL

NATURAL CAPITAL

SOCIAL CAPITAL

$ CAPITAL

energy

resources

sinksbiodiversity

population

aging

Income disparity

Changing values

Labour shortages Skill shortages

Migration Technology

Innovation

Complexity

Debt

Credit

Economy

Government funding

Change Drivers

INTELLECTUAL CAPITAL

NATURAL CAPITAL

SOCIAL CAPITAL

$ CAPITAL

energy

resources

sinksbiodiversity

population

aging

Income disparity

Changing values

Labour shortages Skill shortages

Migration Technology

Innovation

Complexity

Debt

Credit

Economy

Government funding

security

Population & Wealth• 3 billion more people than when I graduated

• Afghanistan will grow from 29-97 million by 2050

• 1950’s Europe’s neighbours numbered half that of Europe, by 2025, they will outnumber Europeans by a factor of four

• 4 billion people in poor countries; half living in slums but with access to mobile phones and TV

• Impact on free movement of people – essential for tourism;

• Will place enormous demand on emerging economies;

• Most vulnerable to changing climate

Population & Wealth

• Boomers the perfect market

• Desire to travel

• Time and money …until last week

• Pension value and purchasing power dropped 30-50%

• Will this solve the labour shortage problem?

• If still working, will they stay closer to home?

Energy

“World oil resources are judged to be sufficient to meet the projected growth in demand to 2030 on the assumption that the necessary investment is forthcoming…Although new oil-production capacity additions from Greenfield projects are expected to increase over the next five years, it is very uncertain whether they will be sufficient to compensate for the decline in output at existing fields and keep pace with the projected increase in demand. A supply side crunch in the period to 2015, involving an abrupt escalation in oil prices, cannot be ruled out.“

World Energy Outlook, 2007

Climate Change and Tourism

Climate Change and Tourism

Climate Change

2020 BAU CO2 =2586 million

1990 CO2 = 673 million

2020 Target CO2 = 471 million

2.115 billion tons

Ecosystem Vulnerability

• Every year we destroy 44 million acres of forest…

• Lose 100 million acres of farmland….

• Lose 24 billion tons of top soil

• Use 160 billion tons more water than is produced by rain

Canada’s USP

Capital and Credit

• Where will the capital come from?

• Aging population and social security; health care

• Capital to reduce dependence on fossil fuels

• Ecosystem restoration

• Crisis Response

Something’s Wrong

• “Climate change is the greatest and widest-ranging market failure ever seen” Sir Nicolas Stern

• “The food crisis of 2008 has revealed market failures at every link in the food chain.”Economist, April 2008

• This is the worst financial crisis since the Great Depression. You've seen the sudden deterioration of perceived credit quality of financial institutions around the world; you've seen the sudden failure of major institutions. John Lipsky, Head of the IMF

Existential Risk • Looking in the wrong direction

• Wearing the wrong set of lenses

• Using a faulty operating manual or inaccurate map

• System Change

We’ve planned as if we were an Industry

From Machines to SystemsMachines can be taken apart, and reassembled

Machines are complicated but staticSystems grow in complexity over time

Systems can adaptTheir character emerges

When we’re really a network

AWARENESS AND IMAGINATION ARE EVERYTHING

WHAT YOU SEE IS WHAT YOU GET or WHATYOU GET IS WHAT YOU SEE

WHAT LENSES ARE YOU WEARING?

Here’s a network you are familiar with

We’ve planned as if we were an Industry

We’ve planned as if we were an industry when We’re Really a Swarm

• Loosely coupled network

• An ecosystem

• Comprising a host of independent, self organizing agents

• A swarm

• How are swarms lead?

• How do you herd cats?

When We’re Really a Swarm

• “It turns out that .. a collection of small, simple agents with limited intelligence, local decision-making capability, and a communication path to nearby peers can outperform a large centralized processor.

• Moreover, a decentralized system has several important advantages over a centralized one, most notably robustness and flexibility.”

Frank Lacombe of the Evolutionary and Swarm Design Group at the University of Calgary

Air Traffic Patterns

It’s Not Size but Connections That Matter!

A Question For You?

What do Air Canada, Google, CISCO, YVR Airport Authority, TELUS, Translink and this

Hotel have in common?• We’re part of a business ecosystem

• We are linked by the communications and transaction flows of our customers

• We act as independent agents but somehow the sum of our activities shows order

• We’re all in the connections business

CONNECTIVITY

INFORMATION and COMPLEXITY

1.5 billion Mobile phones

1.2 billion web users

108 million web sites

100 million blogs

6 billion people

9 billion people

More Connectivity = More Complexity

Some Connectivity is Good

Wealth creation and growth are a story of connections

The more people connect the larger the market

The larger the market, the more people can specialise

The more we specialise, the more we exchange

The more we exchange ideas and capital, the more innovation and develop intelligence

The more intelligence the more resilience -- but only up to a point

More Complexity = More Uncertainty

Tightly Coupled Networks are the most vulnerable

Scale Free Networks

• Most points have small numbers of links

• Some have many & become hubs

• Hubs grow in size and complexity

• Become increasingly vulnerable

Example

• Air traffic routes

• Web: or Google or Facebook

• Electrical grid

• Key stone species in ecosystems.

More Complexity = Less Resilience

• Complexity costs

• Increasing complexity produces “diminishing marginal returns”

• Over time costs increase and returns diminish

• Eg Oil

• Expanding portion of wealth/effort spent on maintaining or adding complexity

• Eg 9/11

TRENDS

DRIVERS

PARADIGMS

Most damage comes from from what you can’t see coming at you on the surface

Are our leaders asking the right questions? How do researchers help leaders ask the right questions?

What Accelerates Vulnerability?

• Interconnectedness increases potential shocks

• Interconnectedness extends scope and impact

• Interconnectedness increases speed and reduces detection and response time

• Interconnectedness produces “cocantenation” of change drivers - a.k.a “the Perfect Storm”

• Importance of anticipation; imagining the dynamic connections.

• More modeling the future; less measuring the past.

REsearch: Issues to Ponder• If change is the only constant, are we looking forward

enough? How much energy are we putting into understanding the underlying dynamics of change?

• Have we understood the unexamined assumptions that underpin our perceptions? What lenses are we using?

• Are we asking the right questions or do we just obey orders?

• Are we spending too much time labelling and not enough conversing and engaging?

• Will seeing ourselves differently enable new solutions; help embrace new partners; use new technologies, channels and listening devices?

• Three specifics

1. Are We Listening?• If markets are conversations, are we listening to the buzz?

• If destinations are brands, are we monitoring our changing reputation – what’s being said about us?

• Are researchers working with the web department?

• Are exploring new ways of connecting with customers?

2. Are We Modeling Reality?• Lessons from complexity and networks

• Experimenting, testing alternative realities

• Carrying capacity – again!

3. Developing Intelligence?• Intelligence of a system is a function of the connections and

the exchange of information.

• More intelligence = more resilience

• Are we building the infrastructures that enable and encourage knowledge sharing ?

RENEWAL

RENEWAL• Tourism will have to face natural limits and re-frame its

entire approach

• Yield and value growth will have to replace volume and commodification

• This has implications for • What we sell

• How we sell it

• How we enrich it

• What we charge for the experience

• How we steward the resources on which it is based