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News | Wednesday, 05 August 2009

Tourism – Free Markets and Goskomtsen

Julian Zarb

This year I experienced the phenomena that followed the collapse of the Berlin Wall and the Iron Curtain that was to change the last ten years for Europe and the World, like no other period in history has done before, when I visited the German Capital City. The Berlin Wall symbolised the obvious schism that exists between freedom and democracy and autocratic rule and state control of the markets and consumer choice. Tourism, like every other industry did benefit from this opening up of the markets, we have seen new and emerging destinations that were once looked on as very poor relations to the ex Soviet Union, such as Estonia, Latvia and Lithuania, for example, develop a tourism industry that is based on unique selling principles which were not even conceptualised a decade before. People will travel to destinations that can offer value for money, quality service and products and political stability. Anyone who has visited the Soviet union some thirty or even twenty five years ago will agree that, even though the country was overflowing (indeed it still is overflowing) with history and culture, this was painted a very grey and dull colour because of the government control and the policy of extreme communist interventions.
Can you imagine being told where you can visit, which hotel you can stay at, which restaurants you can eat in and even how you can travel from A to B? Certainly this may seem alien to many of us who cannot appreciate what these restrictions meant to those who had to live under these circumstances. No government can maintain law and order for any length of time where this is being imposed continuously in an autocratic manner. On the other hand, education and a more liberal form of government that is democratically elected will have a far reaching effect on the GDP and Economic Growth, because people feel more motivated and safer. It is this style of governance that brings with it an element of stability because of the free market and the issue of choice and consumer protection. Quality is not just a question of the intangible elements but it is also a question of those tangible issues which can have a direct and immediate impact on a visitor’s (and the local resident’s) perception and experience.
Tourism and state control of consumerism just do not go together at all! Over the past ten years we have seen a decline in the tour operator and the mass tourist market in a number of mature and emerging destinations, this has meant that people are becoming more independent and selective in the places they visit and the services or products they choose. Education and the media have made many consumers or tourists this selective! Products today must be safe, they should possess a unique element and they need to be attractive to look at and as regards cost. This last factor was generally seen as the primary motivator for any product promotion campaign – indeed where states imposed a central purchasing policy as well as import subsidy taxes this factor was the dominant motivator for any consumer.
It would be very difficult for today’s consumer to consider being told what to buy and where to shop simply because of a pricing policy! In the same way that we will not, today, tolerate itineraries that are based on mass tourism principles and very strict economies of scale, quality and satisfaction come first for today’s tourist. The attractiveness of any destination does not stop at its culture and history alone but must be seen in the manner in which the products and service are offered in a fair and competitive environment – this is the difference between those destinations that believe in free market and those that still believe that Goskomtsen or state control of pricing can add value to any country or destination.

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05 August 2009
ISSUE NO. 593

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Malta Today

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