Thesis Proposal

Investigation of Factors Affecting Tourism Industry: A Study of

Pakistan

Rida Mansoor
17032
Hina Zulfiqar
17431
In Partial Fulfillment of
the Requirements for Degree of
Masters of Business Administration
Department of Management Sciences
Iqra University, Islamabad Campus
2015

ii

Certificate
It is to certify that M.B.A (MGT) thesis proposal titled Investigation of Factors
Affecting Tourism Industry: A Study of Pakistan prepared by Rida Mansoor and
Hina Zulfiqar Enrollment No. 17032 and 17431 has been approved for
submission/defense.

Mr. Kashif Ur Rehman

Thesis Supervisor

iii

ABSTRACT
Since the war on terror initiated in 2001, after the attack on the Twin Towers,
situated in New York, United States. The US led invasion of Afghanistan has spilled its
consequences across its Eastern border. Since then Pakistan has been a victim of
terrorism and religious extremism due to its strategic alliance with the United States of
America. There are many factors due to which Pakistans tourism industry is not getting
much attraction by tourists at the national and international levels. Some of the factors
include low budget, low income level of visitors, terrorism, low support from government
as well as visitors and societal and cultural factors. The objective of this research paper is
to find out those factors which are affecting the tourism industry in Pakistan.
Furthermore, this study will also find out the marketing strategies which can help
promote tourism in those areas where there is low patronage of tourism as well as to
analyze the current situation of tourism in Pakistan. This study will be quantitative in
nature. The study will use survey approach to gather data from respondents. The
convenient sampling technique will be used to select the respondents. The adopted or
self-structured questionnaire will be used. The data will be collected from university
students and tourists. The advance econometric technique will be employed to determine
the determinants of tourism industry. The SPSS software will be used to analyze the data.
The findings of study will extend the existing literature. The findings of study will also
facilitate the policy makers and owners of restaurants in making the suitable marketing
policies to cope up the problems. The results of study will also help in improvement
tourism industry in Pakistan.
Keywords: Tourism, Terrorism, Cultural factors, Societal factors, Victims of
terrorism, War on terror, Pakistan

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Dedication

This thesis is dedicated to my parents.

For their endless love, support and encouragement

Table of Contents
Certificate ............................................................................................................................ ii
ABSTRACT ....................................................................................................................... iii
Dedication .......................................................................................................................... iv
CHAPTERS ....................................................................................................................... 1
1.

INTRODUCTION ..................................................................................................... 1
1.1

Background of Study............................................................................................ 1

1.2

Background and Problem Statement .................................................................... 3

1.3

Problem Statement ............................................................................................... 4

1.4 Objectives and Research Questions of the Study ...................................................... 4

1.5 Research Hypotheses................................................................................................. 4
1.6 Rationale of Study ..................................................................................................... 5
2.

LITERTURE REVIEW ............................................................................................ 6

2.1 Tourism Environments Impact ................................................................................ 6
2.2 Tourism and quality of life ........................................................................................ 9
2.3 Tourism development and prosperity: Challenges measurement ........................... 10
2.4 Prospects for Competitiveness ................................................................................ 10
2.5 Successful Tourism Explore Social Paradigm: Competition and Cooperation....... 11
2.6 Hotel Selection Factors Influencing Tourism ......................................................... 12
2.7 Perceptions of Business and Leisure Travelers towards Hotels .............................. 12

3. RESEARCH DESIGN AND METHODOLOGY .................................................... 13

3.1 Research Method ..................................................................................................... 13
3.2 Sampling Technique ................................................................................................ 13
3.3 Sample Size ............................................................................................................. 13
3.4 Data Collection Methods......................................................................................... 13
3.4.1 Primary Data .................................................................................................... 13
3.5 Data Collection Tool ............................................................................................... 13
3.6 Reliability Analysis ................................................................................................. 14
3.7 Data Analysis .......................................................................................................... 14
REFERENCES ................................................................................................................. 15

CHAPTERS
1. INTRODUCTION
1.1

Background of Study
It is a major concern in many countries to prevent and grow their tourism industry

and also prevent natural and cultural heritage for the future generations. In order to
prevent cultural heritage for future generations, about 157 countries collectively
established the World Heritage Convention in 1972 and 582 sites are registered for the
prevention of the cultural endowment on the UNESCO World Heritage list. Many
countries are contagious towards tourism as a business to generate revenue for the
country, like Thailand. The volume of foreign visitors increased to 13.83 million in the
year 2006 which boosted the Thai economy, while currently its annual income from
tourism is more than 482.319 million baht (Tourism Authority of Thailand, 2008). The
performance of South Asians is also improving regarding tourism for last few years but
according to the 2005 statistics, Pakistan is continuously behind hand from other
countries (WTO, World Tourism Barometer, 2005). Pakistan is far behind countries like
Nepal, India, Sri Lanka, and, even Maldives and Bangladesh. Pakistan tourism receipts
demurred by -2% from $185.6 million in 2004, to $185.3 million in 2005. Some of
Pakistans heritage areas are completely ignored by the local citizens without
understanding the importance and significance of the natural and cultural beauty.
Furthermore the local communities, stakeholders and people treat the dilapidation
and extermination of heritage as a normal thing. No Government authority or the general
public is taking any responsibility to prevent the

heritage resources for future

generation. Although, there is a need that Govt. provides some funding for the

maintenance of present heritage. And, an alternative solution is that the general public
also takes some preventive actions and stand on their own feet to develop a proper
marketing plan and other strategies for making tourism more effective (Jokilehto, 1999).
These strategies can help the local communities to prevent their own natural heritage
resources by their own and also generate sustainable income and save there, as well as
heritage future.
After the Second World War, this marked the beginning of the end of modern
international tourism growth quickly (Chen & Tseng, 2005). Toson, (2002) suggested
that this high growth was, " as a high income elasticity and high price elasticity of major
achievement compared to Many factors Common to the development of modern
industrial society to contribute to foreign tourism, increased urbanization, population,
education and leisure activities designed to stimulate the desire of individuals to travel
abroad. Increase revenue and reduce the cost of international travel is also surprisingly
rapid growth of international tourism". An early researcher in the field, Pike (2002), was
shocked "to discover how little attentions to the flow of tourists between the two
countries were given the geography, demography and other social scientist. Judging by
the accumulation of empirical studies, however, the situation changed. In the past three
decades, a growing number of studies have attempted to model the determinants of
international tourism flows. Although each study has made contributions to the field
were, they generally understand the impact of this issue is minimal. Object of study
conditions, methods, results and research, often very different in another, it is difficult to
call a general rule. This study will be a research, therefore, necessary to determine the

response of examining a number of factors, while keeping in mind the differences

between studies, which may explain the different results.

1.2

Background and Problem Statement

In modern world, tourism industry is gaining importance. According to

researchers, the tourism is a focal point for marketing and development of new tourists
destinations in third world country (Echtner & Prasad, 2002). According to WTO, about
30% of all international tourist arrivals are in Third World (WTO, 1999). However, over
the last few decades, there has been mounting criticism of the portrayal of these
destinations and their people in promotional materials (Britton, 1979; Mohamed, 1988;
Cohen, 1989; Crick, 1989; Selwyn, 1993; Silver 1993; Cooper, 1994; Wilson 1994;
Dann, 1996a, b; Morgan and Prichard, 1998; Sturma 1999 as cited in Echtner, 2002). It is
also found that a few studies have been conducted and noticed the issues of tourism
industry in third world countries (Britton, 1979: Silver, 1993). A few researchers also
examined the tourism promotion in these third world countries (Cohen, 1989; Morgan &
Pritchard, 1998; Cooper, 1994).
Pakistan is a developing country and a few studies have been conducted and gave
no much attention to tourism industry in Pakistan. It is also found that tourism industry in
Pakistan has a bright view and it can greatly contribute to development and economy. But
it is also found that this sector is not flourished up to the mark due to lack of proper
attention and initiatives of concerned institutions. Only a few researchers have worked on
marketing problems and after the war and terror by United States (Hossain, 2002).

1.3

Problem Statement
Based on the previous discussion, the specific problem statement of study is to

determine the determinants of tourism industry in Pakistan. Furthermore, the study will
also investigate the types of marketing strategies that can enhance and promote the
tourism industry in Pakistan.

1.4 Objectives and Research Questions of the Study

On the basis of extensive literature review, the following are the objectives of
present study.

To determine which factors affect the tourism industry in Pakistan.

To facilitate marketers in the knowledge of these factors according to the results.

To determine the reasons of decline of tourism industry in Pakistan.

To determine the marketing strategies that can help in promotion of tourism industry
in Pakistan.

On the basis of above objectives, the specific research questions of study are as follows:

What are the determinants of tourism industry in Pakistan?

Is the tourism industry really affected by societal and cultural factors?

How do these factors affect the tourism industry in Pakistan?

Which type of strategies of marketing the tourism developers use to promote the basic
tourism heritage areas in Pakistan?

1.5 Research Hypotheses

H1: There is an impact of societal factors on the tourism Industry.
H2: There is an impact of cultural factors on the tourism industry.
H3: Better marketing strategies can promote Tourism in areas of low tourism patronage.

H4: How do the local communities and authorities share amenability for the formulation
of polices and strategic management plan?

1.6 Rationale of Study

Pakistan is a developing country and a few studies have been conducted and gave
no much attention to tourism industry in Pakistan. In 1993, research focused on the
problems faced by tourism industry (Patwari, 1993). The results of previous studies also
found that there is ample scope for development and extension of tourism industry in
Pakistan. The review of literature also revealed that host countries are not providing
ample facilities to tourist according to their needs and demands. Only a few researchers
have worked on marketing problems and after the war and terror by United States
(Hossain, 2002). It is also found that tourism industry in Pakistan has a bright view and it
can greatly contribute to development and economy. But it is also found that this sector is
not flourished up to the mark due to lack of proper attention and initiatives of concerned
institutions. As the tourism industry in Pakistan have enormously suffered due to
inadequate resources and promotional campaigns, it is necessary to study the approaches
to promote this industry. In Pakistan, a number of societal, cultural and security factors
have great effect on tourism industry. It is needed to study these factors to overcome the
limitations and problems and provide remedial guidelines.

2. LITERTURE REVIEW
2.1 Tourism Environments Impact
History tells us that human beings are always in search of their paradise on earth
as well as they have a thirst to explore and visit new as well as for most places. Tourism
is one of the best tools for human beings who can easily quench their thirst of visiting and
exploring different areas and cultures. But there are certain conflicts in tourism strategies
which lead towards poor control and imbalance over it. So, there is a need of application
of better management theories along with the practices so that tourism marketing can be
easily understood and can be enhanced. Sometimes visitors may get the advantages or
disadvantages by the tourism of a particular place. So the development is very necessary
in this field so that visitors may get the maximum benefits from their visits to a particular
area or site. Most of the times the selection of environment or climate is also not
appropriate by a visitor which may lead to the negative impacts over the tourist of a
particular place. Lack of visitors understandings and knowledge about a particular place
also leads towards the lack of tourism growth in Pakistans heritage sites. There is also
the need of understanding the various impacts which influences the tourism growth in
Pakistan. It includes impacts on economy, impacts of tourists and local residents,
terrorism, environmental safety and damage, impact on economy.
According to (Law, 2002) economic impact of tourism is very
calculate

because

there

are

difficult

to

huge complexities in the methods which are used to

calculate impacts of economy over tourism. It is also difficult to analyze those methods.
For instance, it is difficult to measure and calculate the income level as well as
employment level of people from their shops, roads, hotels, restaurants, etc. because it is

a time taking method. Sometimes, the visitors pursue negative impacts from any heritage
site instead of pursuing the positive impacts. Qualified tourists are also required for the
growth of heritage in chital valley of Pakistan. Inflation is one of the big reasons for
lower growth of tourism in Pakistan. Furthermore, it may include the opening costs as
well as over dependency on tourism which leads towards low growth in Pakistan.
According to (Pearce, 1996), and (Mason, 1995)the jobs patterns have been changed
due to high cost of living in the tourists places. The use of land has also been changed
due to the mass tourism (Fowler, 1992). Social growth as well as global growth is also
required in this perspective. According to (Smith, 2003), tourism sites should be managed
with great responsibility and carefully so that more tourists can be attracted. Some
practices can also be used for this perspective so that the positive impacts can easily
influence the local as well as foreign tourists. The positive impacts of tourism include:

Balance between the demand and supply of a particular economy

Employment generation

Contributing in the earnings of foreign exchange

Sometimes the negative effects also materialize from the development of the tourism
away from the satisfactory point. For the historical point of view tourism environment
plays an important role for the development and betterment of tourism in the heritage
places. If we do not create stability in the tourism environment we have to deal with the
carrying capacity of heritage attraction (Simpson, 1999). Many tourism sites are so
scrappy that they need to be cared more sensitively. Other negative point regarding the
tourism promotion comes that, many people are working on high managerial positions
or

having

their

own

businesses (Mathieson & Wall, 1982). So the local people

generate enough money from their own resources and this will discourage the tourism
promotion to much extent. Tourism did not improve their way of living; in fact the
created job will feel them substandard. People want the job opportunities which are more
effective, want high skills of employment and provide them better opportunities to
generate money and high wages rate (Marcouiller, 1997). This job doesnt need high
skills to perform the job also this job gives temporary employment with low wage rate
and this becomes a major flaw of the tourism promotion and sustainable development
(Ribeiro & Marques, 2002). Regrettably,

tourism

has

not

been

promoted

in

developing countries as it has been promoted in the developed countries. So it is very

important to know the existing condition of tourism in local areas so that it can be easily
encouraged. Some of the fiscal circumstances applicable to the current situation of
tourism are:

Developing countries should depend on tourism to increase the revenues.

KA large quantity of productivities and rates flow-back to foreign investors and

high escape arises.

Executive positions and professional seats are employed by non-local employees.

A country may lose its authority if it is facing such kind of factors in its economy. It is
said that a society should help its own to promote the tourism of its country. Economic
monopoly also raises conflicts in tourism marketing. It is also stated that it is difficult to
analyze that should have the major right of any heritage or cultural area and how they
should be managed. According to (Masson, 2003), the perception of any visitor depends
upon the judgment and position of the witness which leads towards the positive or

negative impacts of a certain site. For example, more jobs can be achieved if a hotel is
built in a low tourism area and it has a positive impact.
As (Masson, 2003) states that: Any relevant debate on tourism impacts need to
consider the value position of observers and commentators and should be set within cares
of the wider context of tourism
Tourism places are also affected by the following causes:

The attractions of a particular place are not raised for the tourists so that they can
fully enjoy a particular place.

Most of the times the environment or climate has not been raised for the tourists
and locals are failed to attract the attention of tourists towards the traditional
buildings.

In tourism sector, jobs are not raised for the people who actually want to promote
tourism with their skills and abilities.

Hotels and restaurants are very expensive for the tourists.

2.2 Tourism and quality of life

Travelers will be affected by the source and quality of life of the citizens of these
countries enjoys a traveler who carries. In particular, the static nature of the industry
obviously does not take into account the profile and behavior of visitors to the different
nature of a particular destination, or the rapid development of the international tourism
market. This is the best first approximation at a given time to reach visitors to understand
the possible dimensions. For example, a futurist think, unlike today's travel market, the

10

future will see a prosperous, various forms of tourism and culture, history and education
(Augustyn & Ho, 1998).

2.3 Tourism development and prosperity: Challenges measurement

Specific objectives, hides a key aspect of our understanding of these complex
phenomena opportunities. Each discussion has assumed that the measures and the
hypotheses are accurate to capture the "truth." This assumption has long been concerned
professionals (Ashley, Boyd, & Goodwin, 2000). The most serious of these problems
associated with the true size and nature of the direct economic costs of tourism, as well as
its subsequent indirect economic impact. Significant progress has been made in recent
years to strengthen the reliability of these measures and the development of a separate socalled satellite accounts, these sub-accounts more accurately portray the national
accounting standards and the country's tourism. Additionally, satellite accounts offer
additional way of measuring things can be difficult to directly in the national accounts
treasury(Dritsakis, 2004). Significant progress has been made in recent years to
strengthen the reliability of these measures and the development of a separate so-called
satellite accounts, these sub-accounts more accurately portray the national accounting
standards and the country's tourism. Government become more involved in the tourism
industry has grown as tender. They encourage tourism (e.g., foreign currency from
France, England and Japan in the late 1960s, bonds, 1979 restrictions, as well as to
encourage foreign travel (Chen & Chen, 2010)

2.4 Prospects for Competitiveness

At first glance, the competitiveness, it seems a simple concept, these small
differences. According to the Concise Oxford Dictionary, the quality of competition is in

11

a better position. But when we try to measure, we begin to understand the difficulties it
defines as competitive and as a relative concept (i.e. a relatively favorable that?), usually
multidimensional (i.e. no outstanding qualities?) (Sirakaya, Teye, & Snmez, 2002).
There seems to be no universally accepted definition of competitiveness. It may be too
broad and complex concept, despite the attempts to encapsulate it in generally applicable
provisions. Buhalis, (1998) documented different competitive point of view, and (San
Martin & Rodriques Del Bosque, 2008) argues that poor policies at the national level, as
a result of a competitive force obsession. Perhaps the situation is best summed up by
(Crouch & Ritchie, 2010)

2.5 Successful Tourism Explore Social Paradigm: Competition and

Cooperation
In this study, the main theme of the model will be to increase the competitiveness
of the destination. This theme will reflect the realities of the international tourism market.
Should recognize that to be successful, the destination must ensure that their general
appeal, and they offer visitors to experience wholeness must be equal to or exceed the
experience of many other areas open to potential tourists in the world. The most serious
of these problems associated with the true size and nature of the direct economic costs of
tourism, as well as its subsequent indirect economic impact. Quality of tourism products
on a global scale may be what some authors call the competing (Fodness & Murray,
1999), to compete effectively. From a social point of view, these authors also argue that "
in the twentyfirst century international tourism will be the primary means to satisfy
human desire to hold a higher quality of life, some of which will " promote a more
realistic human social relations " (Copeland, 1991).

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2.6 Hotel Selection Factors Influencing Tourism

These properties directly influencing choice is deterrence determinant Properties
: They may cause consumers to purchase intention and differentiate between two
competitors (Chu & Choi, 2000). Services and facilities can be ordered by phone or
through online routes, is a function of a product or service that leads consumers to choose
a product than others (Ngai, 2003). Germany " view site NED degree Traveler " ND
variety of services and amenities important to customer satisfaction. Garbers et al.,
(2006) found that clean accommodation, and then safety and security for the money, stay
polite and STA, the value of helping others happy (Dolnicar, Business travellers hotel
expectations and disappointments: a different perspective to hotel attributes importance
investigation. 2002). Researchers also noted that personal service, physical attraction,
relaxation, service standards, appealing image, and value for money are significant
opportunities for guests to choose a hotel choose property from the top, estimate
traveler.

2.7 Perceptions of Business and Leisure Travelers towards Hotels

Many studies have examined their criteria for the selection of the hotel business
and leisure travelers. These studies show that it is important tribute Arras hotel choice for
business travelers is the cleanliness and the location (Yu & Chang, 2009). Many studies
have been published in its focus areas of the hotel and tourism to support applications
such as rent, hotel management, concierge services, and tour planning methods. Mueller
& Kaufmann, (2001) discussed the need for the development of expert systems for a
number of precautions hospitality industry. Dolnicar, (2002) introduced theories, which
were applied to real estate, renting and domain management at three expert systems.

13

3. RESEARCH DESIGN AND METHODOLOGY

3.1 Research Method
This research will be quantitative. Data will be collected from students who are
studying in different universities of Islamabad and Rawalpindi. Sources will be different
within the university so that monotonous results could be avoided as it was also noted
while reviewing previous researches.

3.2 Sampling Technique

The technique used to acquire my sample for this research will be convenient
sampling technique. This is to maintain the quality of research so only concerned people
will fill out the questionnaire.

3.3 Sample Size

This study will collect data from 200 students studying in different universities of
Islamabad and Rawalpindi.

3.4 Data Collection Methods

3.4.1 Primary Data
Questionnaire survey will be conducted as a tool for primary research and collection of
data.

3.5 Data Collection Tool

To extract the necessary answers for this study to formulize questionnaires were
developed and circulated. The adopted questionnaire will be used to gather the data from
respondents.

14

3.6 Reliability Analysis

Reliability of the data gathered would be calculated via the reliability test option
in this software, which will produce a coefficient known as Cronbachs alpha, which
represents validity of the gathered data.

3.7 Data Analysis

Ordinary linear regression will be used for this research. The hypotheses will be
tested via this statistical model. This model will be executed through computer software
for statistical calculations known as SPSS.

15

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